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The Impact of Employee Stock Option Adoption and Incidence on Productivity: Evidence from U.S. Panel Data
Author(s) -
SESIL JAMES C.,
LIN YU PENG
Publication year - 2011
Publication title -
industrial relations: a journal of economy and society
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.61
H-Index - 57
eISSN - 1468-232X
pISSN - 0019-8676
DOI - 10.1111/j.1468-232x.2011.00648.x
Subject(s) - stock options , productivity , stock (firearms) , business , panel data , economics , finance , econometrics , economic growth , engineering , mechanical engineering
This paper examines the productivity effect of broad‐based and executive stock option programs in adoption year and five subsequent years. The findings include a positive impact on productivity, which is maintained over a five‐year period after adoption for executive plans but diminishes immediately for broad‐based plans. We interpret these findings as evidence of stock option usage being of benefit to organizations. However, to sustain the impact of broad‐based plans options, grants may need to be made with the same frequency as executive option grants.