I am currently a doctoral student in the Gatton College of Business & Economics at the University of Kentucky studying Finance. My research interests are in corporate finance, payout policy, options, and dilution. I am interested in teaching at all levels and I have experience teaching both traditional and online courses. I am on the job market this academic year 2017-2018 and will be attending the FMA meeting in Boston. My interests outside of academia include cycling, traveling, and home improvement projects.
This paper studies the strategic use and timing of share repurchases by insiders for personal gain. Using grant level compensation data and a hand-collected sample of monthly repurchases, I find a positive relation between CEO equity sales and share repurchases. I identify the relationship by instrumenting equity sales with equity grant vesting schedules. This relation is persistent across firm characteristics and does not appear to be destroying shareholder value. The results indicate managerial self-interest motivates a subset of share repurchases.
This paper provides unique evidence on the tradeoff between signaling commitment and maintaining timing and abandonment options in payout decisions. We study a new and growing form of payout: SEC Rule 10b5-1 repurchase plans, which require firms to pre-commit. Relative to open market repurchases, these preset plans provide an expanded available repurchase window and increase legal cover, albeit at the cost of reducing repurchase flexibility and the option to time repurchases. Firms with greater internal capital reserves or easier access to external capital are more likely to pre-commit to a repurchase plan, as are firms with a history of poor repurchase timing and firms constrained by blackout windows. Using the 2008-2009 financial crisis as a positive exogenous shock to the marginal benefit of financial flexibility, we further find that the growth in preset repurchase programs significantly stagnated during the crisis. Consistent with preset plans sending a signal of commitment, market reactions to Rule 10b5-1 repurchase announcements are positive, significant and increasing in the implied preset portion of the plan.The Evolution of Employee Compensation, Dilution, and Payout Policy (with Alice Bonaime, Kathleen Kahle, and Alok Nemani)
We capitalize on the recent shift from stock options to restricted stock to reexamine the relation between equity compensation and payout policy. While options and restricted stock both contribute to dilution, options also incentivize managers to substitute repurchases for dividends. These features allow us to empirically disentangle the substitution channel from the dilution channel and reconcile prior evidence with current trends. We find that repurchases are positively related to total options and restricted stock. Moreover, executive options do not incrementally predict repurchases or the dividend-repurchase choice. These results strongly support dilution as the primary channel through which compensation relates to payout policy; compensation-motivated substitution no longer has first-order effects on payout. Mandatory option expensing serves as a shock to equity compensation and confirms the dilution channel. We conclude by verifying two predictions of the dilution channel: Equity compensation is positively related to repurchase frequency and inversely related to repurchase timing.