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Selling company shares to reluctant employees : France Télécom's experience

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Author Info
DEGEORGE, François
JENTER, Dirk
MOEL, Alberto
TUFANO, Peter

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Abstract

In 1997, France Télécom, the French telecommunications firm, went through a partial privatization or Opening of Shareholding. As part of this process, the government offered current and prior France Télécom employees the opportunity to buy portfolios of shares with various combinations of discounts, required holding periods, and levels of downside protection. We adapt a neoclassical model of investment decision-making that takes into account firm-specific human capital and holding period restrictions to predict how employees might respond to the share offers. Using a new database that tracks over 200,000 eligible participants, we analyze the employees' characteristics and their decisions regarding (a) whether to participate; (b) how much to invest; and (c) what form of stock alternatives they selected.

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Publisher Info
Paper provided by HEC Paris in its series Les Cahiers de Recherche with number 703.

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Length: 55 pages
Date of creation: 24 Apr 2000
Date of revision:
Handle: RePEc:ebg:heccah:0703

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Postal: HEC Paris, 78351 Jouy-en-Josas cedex, France
Web page: http://www.hec.fr/
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Related research
Keywords: Privatization; human capital; France Telecom; employee ownership; portfolio choice;

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Find related papers by JEL classification:
E69 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Other
G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Capital and Ownership Structure
L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Dong Lee, 2009. "How Do Employees View Their Underwater Stock Options?: Evidence from the Stock Option Exchange Program," Journal of Financial Services Research, Springer, vol. 35(3), pages 273-296, June. [Downloadable!] (restricted)
  2. Philippe Desbrières, 2002. "Les actionnaires salariés," Working Papers FARGO 1021101, Université de Bourgogne - Latec/Fargo (Research center in Finance,organizational ARchitecture and GOvernance). [Downloadable!]
  3. Klos, Alexander & Weber, Martin, 2004. "Portfolio Choice in the Presence of Nontradeable Income: An Experimental Analysis," Sonderforschungsbereich 504 Publications 04-01, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim. [Downloadable!]
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