Impact of Restricted Stock Grant (RSG) Issuance on Financial Performance of US Software and IT Companies
Name
jia-hxjia-msms-sloan-2023-thesis.pdf
Description
Thesis PDF
Size
753.91 KB
Format
Adobe PDF
Checksum (MD5)
dc06660ae4b918b8ac07c27ffa5ac12d
Author(s)
Jia, Hongxuan
Advisor(s)
Matveyev, Egor
Date Issued
June 2023
Publisher
Massachusetts Institute of Technology
Abstract
This study examines the relationship between the issuance of Restricted Stock Grant (RSG) and the financial performance of Software and Information Technology (IT) companies in the United States (US). Data pertaining to RSG and financial performance are obtained from the companies' 10-K reports and the Refinitiv database, respectively. The sample size will include 30 publicly traded companies listed on the US exchange, with a study period spanning from 2013 to 2022. To estimate the effect of RSG issuance on future corporate financial performance, multiple linear regression models will be utilized. Empirical results show that there is a significant positive relationship between the value of RSGs issued (RSGV) and 2-year forward return on assets (ROA). No significant relationships were discovered between RSGV and return on equity (ROE) and between RSGV and Tobin’s Q (TQ). The results emphasize the importance for corporate managers to tailor their equity compensation schemes to meet the needs of their employees better. From an investor's perspective, the implications of this study signify the potential for the integration of a novel metric in the evaluation and appraisal of a company's financial potential when making investment decisions.
MIT Department
Sloan School of Management
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