Last night, the winners of the Canadian Investment Review Research Award came to Toronto to claim their prize at the 2011 Pension and Investment Awards. William McNally and Brian Smith won the award for their paper, Option Grant Timing, the most comprehensive study of option grant timing in Canada to date. McNally and Smith looked at evidence from over 15,000 option grant dates for over 1,400 companies during an 11-year period. And while the authors did not find any evidence of backdating or spring-loading, they did find that these Canadian stocks experienced an abnormal return in the month after the option grant. In fact, there is strong evidence that shows Canadian companies time their option grants to give undervalued stocks a boost.
You can read the full paper later this year in our special annual print issue of Canadian Investment Review which will be available in December.