Uncertainty avoidance and the timing of employee stock option exercise

• 成果类型: Article
• 署名作者: Bova, Francesco; Vance, Marshall
• 署名单位: University of Toronto; University of Southern California
• 刊物名称: JOURNAL OF INTERNATIONAL BUSINESS STUDIES
• ISSN/ISSBN: 0047-2506
• DOI: 10.1057/s41267-018-0157-5
• 发表日期: 2019
• 页码: 740-757
• 关键词: uncertainty avoidance; Employee stock options; option exercise; COMPENSATION; multinationals; subjective valuation; FAS 123R

摘要

We examine the impact of the cultural norm of uncertainty avoidance on employee stock option (ESO) exercise behavior using proprietary data from a multinational firm. We find that employees from countries with higher levels of uncertainty avoidance exercise their stock options earlier. These findings lend support to a maintained assumption in the ESO literature that employee attitudes toward uncertainty influence stock option exercise behaviors. Our findings further help to explain prior findings of cross-cultural differences in firms' compensation practices by indicating that employee responses to option based pay and firms' consequent financial reporting costs vary as functions of employee uncertainty avoidance.