Please use this identifier to cite or link to this item: https://doi.org/10.1109/MWC.2006.1593521
Title: Agency costs and management contracting: Granting executive stock options as a strategic compensation practice?
Authors: Lam, S.-S. 
Ho, Y.-K. 
Keywords: Agency costs
Cash compensation
Executive stock options
Firm characteristics
Incentives
Management contracting
Issue Date: 2006
Source: Lam, S.-S., Ho, Y.-K. (2006). Agency costs and management contracting: Granting executive stock options as a strategic compensation practice?. International Journal of Human Resources Development and Management 1 (1) : 22-47. ScholarBank@NUS Repository. https://doi.org/10.1109/MWC.2006.1593521
Abstract: This is an exploratory study on the characteristics and performance of firms that choose to grant executive stock options as a strategic compensation practice. According to the push theory of employee ownership, stock options are granted to push employees to create superior financial performance. We find that firms which grant executive stock options offer persistent abnormal firm performance. Firms that grant stock options in lieu of cash compensation do not perform differently in the long run from those that grant stock options as incentives. This finding is consistent with the proposition that the motivation for the use of executive stock options is endogenously determined for any firm given its investment opportunities and technology, risk characteristics and growth options. Copyright © 2006 Inderscience Enterprises Ltd.
Source Title: International Journal of Human Resources Development and Management
URI: http://scholarbank.nus.edu.sg/handle/10635/44489
ISSN: 14656612
DOI: 10.1109/MWC.2006.1593521
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