Equity-based compensation and the timing of share repurchases: the role of the corporate calendar☆

Ingolf Dittmann, Amy Yazhu Li, Stefan Obernberger, Jiaqi (Jacky) Zheng

Journal of Accounting and Economics · 2025 · Volume 80 · Issue 1

DOI: 10.1016/j.jacceco.2025.101798

Abstract

We examine whether CEOs use share repurchases to sell their equity at inflated prices. We document that share repurchases, like equity-based compensation, are affected by the corporate calendar—the firm's schedule of earnings announcements and insider trading restrictions. The corporate calendar can fully explain why share repurchases and equity-based compensation coincide. The alignment with the corporate calendar is stricter in firms with strong internal governance or high external monitoring. When CEOs sell equity, firms are actually less likely to repurchase. Our findings reconcile earlier studies and highlight the importance of the corporate calendar for the timing of share repurchases.

Keywords

Payout policy, Fiscal calendar, Equity-based compensation, Quarterly earnings announcement, Share repurchases, Insider trading

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