It looks like CEOs may have found a new way to "game" the systems for giving and getting stock. According to a piece at Portfolio.com, chief executives are particularly adroit at the way they grant shares to their own family foundations.
According to the publication, a new study by David Yermack, a finance professor at New York University, showed "that four out of five stock gifts in the week before an earnings announcement were made right before a decline in the price of the stock."
The study covered donations by Sandy Weill of Citigroup (NYSE: C), Barry Diller of IAC/Interactive (NASDAQ: IACI), and Stan O’Neal of Merrill Lynch (NYSE: MER)
The study looked at gifts over a two-year period beginning in mid-2003. It will probably be nice bedtime reading for IRS agents.
Douglas A. McIntyre