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When do High-Level Managers Believe They Can Influence the Stock Price?

Upcoming article to appear in the Human Resources Management Journal in 2010 by Benjamin Dunford (Purdue), Wendy Boswell (Texas A&M), and John Boudreau (CEO, USC):

When do High-Level Managers Believe They Can Influence the Stock Price? Antecedents of Stock Price Expectancy Cognitions

Stock-based rewards are often used to motivate high-level managers to take actions to increase the stock price of the firm. However, for many recipients, numerous constraints weaken the perceived link between individual effort and stock price appreciation.

We found that employment at corporate headquarters, firm size, hierarchical level, and contact with investment analysts predicted stock price expectancy perceptions. These findings suggest opportunities and boundary conditions on the capacity for stock-based rewards to motivate stock appreciating behavior in certain contexts.

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