Managerial discretion in authorising open market share repurchases: empirical evidence from the Italian context

Titolo Rivista FINANCIAL REPORTING
Autori/Curatori Elisa Roncagliolo
Anno di pubblicazione 2016 Fascicolo 2015/2
Lingua Inglese Numero pagine 22 P. 95-116 Dimensione file 255 KB
DOI 10.3280/FR2015-002004
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This paper contributes to existing literature on open market share repurchases in Italy by studying authorisations that the board of directors needs to obtain from the shareholders’ general meeting in order to acquire company’s own shares. In such a context, I investigate whether the buyback purpose that managers disclose in their report affects number of shares to be repurchased. Particularly, since managers could potentially benefit from share repurchase programmes carried out in the presence of stock option plans, I explore whether this motivation influences the number of shares they require to include in the buyback programme. In pursuit of my objectives, I analyse reports managers provide shareholders’ meeting to obtain the authorisation to acquire company’s own shares over a 6-year period (2004-2009) in Italian listed companies. Main results suggest that the buyback motivation affects number of shares managers intend repurchasing, highlighting the role of the quality of the board of directors in this issue.

Keywords:Buyback, stock option plans, management, board quality

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Elisa Roncagliolo, Managerial discretion in authorising open market share repurchases: empirical evidence from the Italian context in "FINANCIAL REPORTING" 2/2015, pp 95-116, DOI: 10.3280/FR2015-002004