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Yermack on Charitable Stock Gifts by Executives of Publicly Traded Companies

David Yermack (NYU, Stern School of Business) has posted Deduction ad absurdum: CEOs Donating Their Own Stock to Their Own Family Foundations on SSRN.  Here is the abstract:

ïEFFI study large charitable stock gifts by Chairmen and CEOs of public companies. These gifts, which are not subject to insider trading law, often occur just before sharp declines in their companies’ share prices. This timing is more pronounced when executives donate their own shares to their own family foundations. Evidence related to reporting delays and seasonal patterns suggests that some CEOs backdate stock gifts to increase personal income tax benefits. CEOs’ family foundations hold donated stock for long periods rather than diversifying, permitting CEOs to continue voting the shares.

For more, see Nonprofit Law Prof Blog.

Update:  The Wall Street Journal reports on the article in Stock Gifts That Give Back; Study Finds Top Executives Often Make Donations When Their Shares — and Tax Breaks — Are High, by James Bandler & Mark Maremont.


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