The Future of Broad-Based Options: What Research Tells Us

Abstract

This paper looks at the research to date on the future of broadly granted stock options (options granted to at least half the full-time employees of a company). In the U.S., granting options broadly became popular in the late 1990s, but has lost some of its appeal in the wake of stock market declines, accounting changes, and increased shareholder concerns about dilution. The data indicate a significant minority of companies will change their plans, but a substantial majority will keep them. The data also indicate changes in accounting rules will not affect stock prices and that broadly granted options are better for corporate performance than narrowly granted options.

Citation

Rosen, C. (2006), "The Future of Broad-Based Options: What Research Tells Us", Kalmi, P. and Klinedinst, M. (Ed.) Participation in the Age of Globalization and Information (Advances in the Economic Analysis of Participatory & Labor-Managed Firms, Vol. 9), Emerald Group Publishing Limited, Leeds, pp. 357-398. https://doi.org/10.1016/S0885-3339(05)09012-5