scholarly journals DAMPAK STRUKTUR MODAL PADA SENSITIVITAS PENERAPAN KOMPENSASI OPSI SAHAM KARYAWAN TERHADAP KINERJA

2017 ◽  
Vol 14 (1) ◽  
pp. 1
Author(s):  
Nur Fadjrih Asyik
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Stock Options ◽  
Stock Option ◽  
Company Performance ◽  
Employee Stock Option ◽  
Sensitivity Level ◽  
The Impact ◽  
Option Compensation ◽  
Stock Option Compensation

This study aims to test whether the management that receive compensation in the form of stock options having an positive impact on company performance. This study considers the external performance measurement by identifying Cumulative Abnormal Return (CAR). In addition, this study aims to test whether the company's capital structure affects the sensitivity level of employee stock option compensation and firm performance. Capital structure is measured with debt to equity ratio. The result indicates that the proportion of Employee Stock Option Plan (ESOP) influence company performance in accordance with the predictions. This shows that the more stock options offered to employees then came a sense of belonging which resulted in more motivated managers to improve company performance. Furthermore, the higher the market performance of companies that can be achieved, the higher the profit (gain) will be obtained by the recipient of stock options. In addition, this study also shows that the impact of stock option grants at the company's performance declined with the greater capital structure of liability. This shows that the capital structure of liabilities will lower the sensitivity level of employee stock option compensation and firm performance. The higher the company's liabilities would reduce the rights of the owner of the dividends each period in accordance with the ownership of shares held since the company must take into account the interest costs to be paid to the creditor.

scholarly journals DAMPAK STRUKTUR MODAL PADA SENSITIVITAS PENERAPAN KOMPENSASI OPSI SAHAM KARYAWAN TERHADAP KINERJA

2018 ◽  
Vol 14 (1) ◽  
Author(s):  
Nur Fadjrih Asyik
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Stock Options ◽  
Stock Option ◽  
Company Performance ◽  
Employee Stock Option ◽  
Sensitivity Level ◽  
The Impact ◽  
Option Compensation ◽  
Stock Option Compensation

This study aims to test whether the management that receive compensation in the form of stock options having an positive impact on company performance. This study considers the external performance measurement by identifying Cumulative Abnormal Return (CAR). In addition, this study aims to test whether the company's capital structure affects the sensitivity level of employee stock option compensation and firm performance. Capital structure is measured with debt to equity ratio. The result indicates that the proportion of Employee Stock Option Plan (ESOP) influence company performance in accordance with the predictions. This shows that the more stock options offered to employees then came a sense of belonging which resulted in more motivated managers to improve company performance. Furthermore, the higher the market performance of companies that can be achieved, the higher the profit (gain) will be obtained by the recipient of stock options. In addition, this study also shows that the impact of stock option grants at the company's performance declined with the greater capital structure of liability. This shows that the capital structure of liabilities will lower the sensitivity level of employee stock option compensation and firm performance. The higher the company's liabilities would reduce the rights of the owner of the dividends each period in accordance with the ownership of shares held since the company must take into account the interest costs to be paid to the creditor.

Does Greater Risk-Bearing in Stock Option Compensation Reduce the Influence of Problem Framing On Managerial Risk-Taking Behavior?

2011 ◽  
Vol 23 (1) ◽  
pp. 185-201 ◽  
Author(s):  
Kimberly Sawers ◽  
Arnold Wright ◽  
Valentina Zamora
Keyword(s):  
Risk Taking ◽  
Stock Options ◽  
Stock Option ◽  
Money Stock ◽  
Agency Model ◽  
Problem Framing ◽  
Managerial Risk ◽  
Option Compensation ◽  
Behavioral Agency ◽  
Stock Option Compensation

ABSTRACT: We examine the extent to which the behavioral agency model reflects the relation between greater risk-bearing in stock option compensation and managerial risk-taking. The behavioral agency model predicts that managers with greater wealth at stake will avoid risky projects that threaten their wealth. This greater risk-bearing effect moderates the problem-framing effect, which predicts that loss-averse managers will be more (less) risk-taking when choosing among loss (gain) projects. Using a 2 × 2 between-subjects experiment with 108 M.B.A. students acting as managers, we find that managers are more risk-taking in the loss context than in the gain context when they have at-the-money stock options but not when they have wealth at stake through in-the-money stock options. Further, we find that managers with in-the-money stock options are less risk-taking than managers with at-the-money stock options in the loss context. These findings support the behavioral agency model prediction that greater risk-bearing in stock option compensation (moving from at-the-money stock options to in-the-money stock options) reduces the problem framing effect on risk-taking behavior, particularly when the firm faces a loss decision context. Our results point to the importance of considering the implications of risk-bearing in stock option compensation for managers choosing risky projects that affect firm value.

scholarly journals A Review of Employee Stock Option Plans: Panacea or Pandora’s Box for Firm Performance

2017 ◽  
Vol 10 (1) ◽  
pp. 1201-1207
Author(s):  
Neha Kalra ◽  
Dr. Rajesh Bagga
Keyword(s):  
Firm Performance ◽  
Firm Value ◽  
Stock Options ◽  
Recent Literature ◽  
Academic Research ◽  
Stock Option ◽  
Research And Practice ◽  
Employee Stock Option ◽  
Compensation Package ◽  
Theoretical Foundations

Employee stock option Plans (ESOPs) have gathered enormous attention in recent decades and have become the most controversial component of the compensation package. Organizations around the globe have been using ESOPs to compensate their employees at managerial and non-managerial levels. While traditionally the stock options were reserved for top management employees, lately there has been strong growth of broad-based plans primarily to increase firm value. Recent literature examining the effects of broad-based stock options are not limited to executive but available for all employees (Core and Guay, 2001; Oyer and Schaefer, 2005; Hallock and Olson, 2010, etc.). However, the shareholders have become increasingly apprehensive about the size and proliferation of adoption of stock option plans. Accordingly, they have been an issue of debate in both academic research and practice circles. The present paper outlines the theoretical foundations behind the use of ESOPs in the compensation mix and strives to address the controversy of whether or not stock options adoptions result in enhancement in firm value. Though the evidence is mixed on the implications of ESOPs, however, there exists robust support for a positive interrelationship between the adoption of these plans and firm performance for large sized firms. 

Dot.com or Dot.bomb? The Unpleasant Tax Surprise of Stock Options in a Volatile Market

2003 ◽  
Vol 18 (4) ◽  
pp. 385-395 ◽  
Author(s):  
Shelley C. Rhoades-Catanach
Keyword(s):  
Stock Market ◽  
Stock Options ◽  
Stock Option ◽  
Financial Impact ◽  
Employee Stock Options ◽  
Stock Market Crash ◽  
Employee Stock Option ◽  
Tax Deductions ◽  
Substantial Decline ◽  
Option Compensation

This case explores the tax treatment of employee stock options as well as associated tax- and financial-planning issues. The number of employee stock option plans and related option grants has increased dramatically in the last decade. Today, senior management and rank-and-file workers alike often own substantial numbers of options and shares of employer stock acquired through the exercise of options. While these holdings can be valuable forms of compensation, exercising options also can be costly and risky. Early in 2000, following the stock market boom and its substantial decline later that same year, many employees who exercised options while the equity markets were at record highs were left with large tax bills. In some cases, the taxes owed exceeded the value of the optioned stock at year-end. This case details the tax and financial impact of option exercise on one employee that chose to retain optioned stock during the stock market crash of 2000. The educational objectives of the case include: (1) becoming familiar with the tax and financial aspects of compensatory stock options, (2) identifying the risks and rewards of option grant and exercise, (3) quantifying the cash inflows and outflows associated with stock options and their tax consequences, and (4) planning to maximize the after-tax value of stock option compensation. The case also discusses the tax treatment of options from the employer's perspective and the policy issues associated with tax deductions for option exercise.

Congressional Intervention in the Standard-Setting Process: An Analysis of the Stock Option Accounting Reform Act of 2004

2007 ◽  
Vol 21 (1) ◽  
pp. 1-22 ◽  
Author(s):  
David B. Farber ◽  
Marilyn F. Johnson ◽  
Kathy R. Petroni
Keyword(s):  
Stock Options ◽  
Political Action ◽  
Fair Value ◽  
Stock Option ◽  
Financial Accounting Standards Board ◽  
Employee Stock Option ◽  
Setting Process ◽  
Action Committee ◽  
The Cost ◽  
The Impact

We examine H.R. 3574, the Stock Option Accounting Reform Act of 2004 (the Act), which sought to prevent the Financial Accounting Standards Board (FASB) from requiring the expensing of employee stock options at fair value. We find that employee stock option expense under the Act would be approximately 2 percent of what it would be under the FASB's preferred method. We also find that House members supporting the Act were more likely to be Republican, to be conservative, and to have received larger Political Action Committee (PAC) contributions. Finally, the larger the impact of H.R. 3574 on the amount of stock option expense reported by the firm for employees who are not top-five executives, the more contributions the firm's PAC made to House members and to members of the committee that approved the Act. This result suggests that corporate opposition to the mandatory expensing of stock options at fair value is not driven solely by concerns of top-five executives about the cost of recognizing their own options.

The Impact of Tax Incentives on the Choice to Hold Shares Acquired from Employee Stock Option Exercises

2012 ◽  
Vol 34 (2) ◽  
pp. 67-91 ◽  
Author(s):  
G. Ryan Huston ◽  
Thomas J. Smith
Keyword(s):  
Stock Options ◽  
Tax Incentives ◽  
Stock Option ◽  
Corporate Tax ◽  
Negative Relation ◽  
Employee Stock Option ◽  
Prior Literature ◽  
Tax Benefits ◽  
The Impact ◽  
Jel Classifications

ABSTRACT This paper extends prior stock option literature by examining the impact of individual and corporate tax incentives on the decision to hold or sell shares acquired through the exercises of incentive stock options (ISOs) and non-qualified stock options (NQSOs). We focus on factors found in prior literature to be associated with the choice to hold or sell in the context of the type of stock option exercised. Specifically, we find that the positive (negative) relation found in prior literature between the decision to hold shares following exercise and future returns (depth) is associated more with NQSOs than ISOs, consistent with individual tax incentives. Examining corporate tax incentives, we find that corporate tax benefits mitigate insiders' likelihood to hold shares obtained from ISO exercise. Furthermore, we find evidence that firms compensate employees to forgo individual tax benefits associated with holding shares from ISO exercise, and as this compensation increases, insiders are more likely to sell following exercise. JEL Classifications: H24; H25; J33.

Are Stock Option Grants to Directors of State-Controlled Chinese Firms Listed in Hong Kong Genuine Compensation?

2013 ◽  
Vol 88 (5) ◽  
pp. 1547-1574 ◽  
Author(s):  
Zhihong Chen ◽  
Yuyan Guan ◽  
Bin Ke
Keyword(s):  
Hong Kong ◽  
Stock Options ◽  
Stock Option ◽  
Data Availability ◽  
Money Stock ◽  
Chinese Firms ◽  
Foreign Investors ◽  
Option Compensation ◽  
Jel Classifications ◽  
Stock Option Compensation

ABSTRACT: We examine the determinants and consequences of stock option compensation to directors of state-controlled Chinese firms that are incorporated outside China and listed in Hong Kong, referred to as state-controlled Red Chip firms, over the period 1990–2005. We find that state-controlled Red Chip firms granted directors a significant number of stock options in response to the demand of foreign investors. However, state-controlled Red Chip firms forced the directors to forfeit a significant percentage of their vested in-the-money stock options due to a conflict between the high-powered stock option compensation and state-controlled Red Chip firms' unique managerial labor market. We find little evidence that directors' stock option compensation changed the behavior of state-controlled Red Chip firms. Overall, our results are consistent with the media's allegation that the stock options granted to directors of many, if not all, state-controlled Red Chip firms are not genuine compensation. JEL Classifications: D21, G32, J33, M40, N25 Data Availability: Data used in this study are publicly available from the sources identified in the paper.

scholarly journals Kinerja Perusahaan sebagai Pemediasi Pengaruh Penerapan Employee Stock Option Plan (ESOP) pada Nilai Perusahaan

2020 ◽  
Vol 30 (4) ◽  
pp. 993
Author(s):  
Ni Ayu Wisma Dewi ◽  
Ida Bagus Putra Astika
Keyword(s):  
Firm Performance ◽  
Firm Value ◽  
Stock Options ◽  
Limited Liability ◽  
Stock Option ◽  
Employee Stock Option ◽  
Employee Stock Ownership ◽  
Cooperative Relationship ◽  
The Relationship ◽  
Positive Effect

Limited liability company (Ltd) based on a contract cooperative relationship which is the basis of agency theory with the risk of conflict. The solution to minimize is the employee stock ownership program with the Employee Stock Option Plan (ESOP) strategy. The purpose of this study is to obtain empirical evidence of the relationship of stock options granted’s number to the firm value through firm performance. This research was conducted at companies listed in the BEI and conducted ESOP grants in 2014-2018. Samples obtained using purposive sampling were 48 observations. Data analysis technique used is path analysis. The results showed that the number of stock options granted had a positive effect on firm performance, firm performance had a positive effect on firm value, the number of shares options granted had a positive effect on firm value, and firm performance mediated the relationship between the number of shares options granted and firm value. Keywords: Employee Stock Option Plan; Firm Performance; Firm Value.

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