Standard principal-agent theory predicts that large firms should not use employee stock options and other stock …-based compensation to provide incentives to non-executive employees. Yet, business practitioners appear to believe that stock …-based compensation improves incentives, and mounting empirical evidence points to the same conclusion. This paper provides an explanation …

Previous literature documents that executives tend to cash out equity incentives when equity-linked compensation vests …

that places its ESPP at the heart of its employee compensation system, we compare the workplace behaviour of employees who …Many large listed firms offer workers the opportunity to buy shares in the firm at discounted rates through employee … incentive pay system analogous to profit sharing, all-employee stock options, or an employment ownership scheme that makes part …