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| Panu Kalmi |
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| ''Stock option compensation and equity values'' |
| ( 2006, Vol. 10 No.2 ) |
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| I present a model where increasing employee participation in a stock option scheme leads to higher performance but with a cost to shareholders. I show that firms with higher market values per employee are more likely to have an option scheme and they offer stock options to a broader group of employees. The model yields empirical predictions that are consistent with the stock option boom of the late 1990s and their reduced popularity after the stock market decline. |
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| Keywords: compensation |
JEL: J3 - Wages, Compensation, and Labor Costs: General
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| Manuscript Received : Mar 06 2006 | | Manuscript Accepted : Mar 08 2006 |
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