Incentives, Targeting, and Firm Performance: An Analysis of Non-executive Stock Options

• 成果类型: Article
• 署名作者: Hochberg, Yael V.; Lindsey, Laura
• 署名单位: Northwestern University; National Bureau of Economic Research; Arizona State University; Arizona State University-Tempe
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhq093
• 发表日期: 2010
• 页码: 4148
• 关键词: instrumental variables; empirical-analysis; piece-rates; COMPENSATION; PRODUCTIVITY; provision; pay; CONSEQUENCES; sensitivity; COOPERATION

摘要

We examine whether options granted to non-executive employees affect firm performance. Using new data on option programs, we explore the link between broad-based option programs, option portfolio implied incentives, and firm operating performance, utilizing an instrumental variables approach to identify causal effects. Firms whose employee option portfolios have higher implied incentives exhibit higher subsequent operating performance. Intuitively, the implied incentive-performance relation is concentrated in firms with fewer employees and in firms with higher growth opportunities. Additionally, the effect is concentrated in firms that grant options broadly to non-executive employees, consistent with theories of cooperation and mutual monitoring among co-workers. (JEL J33, D23, G30, 039, 141, M40, M52, M54)