Money Left on the Table: An Analysis of Participation in Employee Stock Purchase Plans

• 成果类型: Article
• 署名作者: Babenko, Ilona; Sen, Rik
• 署名单位: Arizona State University; Arizona State University-Tempe; Hong Kong University of Science & Technology
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhu050
• 发表日期: 2014
• 页码: 3658
• 关键词: EARLY EXERCISE; PENSION-PLANS; company stock; debt; liquidity; BEHAVIOR; GENDER; matter; terms

摘要

We analyze participation decisions in employee stock purchase plans. These plans allow employees to buy company stock at a discount from the market price and resell it immediately for a sure profit. Although an average employee stands to gain $3,079 annually, only 30% of individuals take advantage of this risk-free opportunity. Participation is more likely among employees who are familiar with stocks, are more educated, are less financially constrained, and make fewer errors in valuing financial securities. Our results suggest that compensation plans requiring active decisions by individuals can result in poor financial outcomes for employees of lower socioeconomic status.