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Broad-based Employee Stock Options in the U.S.Company Performance and Characteristics

Author

Listed:
  • James C. Sesil

    (Rutgers University)

  • Maya K. Kroumova

    (New York Institute of Technology)

  • Douglas L. Kruse

    (Rutgers University)

  • Joseph R. Blasi

    (Rutgers University)

Abstract

This paper analyses data on 490 companies with broad-based stock option plans, matched to data from CompuStat in order to compare their characteristics and performance to that of other public companies. Major findings are that 1) companies with broad-based plans have higher levels of labor productivity, employment growth, and sales growth than otherwise-similar firms; 2) productivity and profitability levels rise as broad-based plans are adopted, and 3) average compensation levels are higher among such companies both before and after the introduction of broad-based plans, indicating that stock options appear to come on top of other compensation.

Suggested Citation

  • James C. Sesil & Maya K. Kroumova & Douglas L. Kruse & Joseph R. Blasi, 2007. "Broad-based Employee Stock Options in the U.S.Company Performance and Characteristics," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 18(1), pages 5-22.
    • Handle: RePEc:nms:mamere:doi_10.1688/1861-9908_mrev_2007_01_sesil
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    File URL: https://www.nomos-elibrary.de/10.5771/0935-9915-2007--5
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    Cited by:

    1. Steven Hegemann & Iuliana Ismailescu, 2017. "The Effect of FASB Statement No. 123R on Stock Repurchases: An Empirical Examination of Management Incentives," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 20(02), pages 1-31, June.
    2. Jin‐Hyuk Kim & Nick Vikander, 2023. "Commitment and discretion in contracts: theory and evidence from retirement plans," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(2), pages 461-488, April.
    3. Avshalom Adam & Mark Schwartz, 2009. "Corporate Governance, Ethics, and the Backdating of Stock Options," Journal of Business Ethics, Springer, vol. 85(1), pages 225-237, February.
    4. Kim, Kyoung Yong & Patel, Pankaj C., 2017. "Employee ownership and firm performance: A variance decomposition analysis of European firms," Journal of Business Research, Elsevier, vol. 70(C), pages 248-254.
    5. Hanen Maalej & Mohamed Triki, 2008. "Déterminants de la pratique de l'actionnariat salarié dans les entreprises françaises," Post-Print halshs-00525419, HAL.
    6. Christina E. Bannier & Sabrina Zahn, 2014. "SMEs' Growth Heterogeneity - Evidence from Regional Developments," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 5(2), pages 23-49, March.
    7. Katsuhiko (Katsu) Shimizu, 2012. "Risks of Corporate Entrepreneurship: Autonomy and Agency Issues," Organization Science, INFORMS, vol. 23(1), pages 194-206, February.

    More about this item

    Keywords

    Broad-based Stock Options; Firm Performance; Wage Effect;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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