We evaluate the impact of the adoption of stock options on firms' financial performance. If stock options are an efficient incentive contract we would expect their adoption to increase both operating income (OI) and return on assets (ROA). Alternatively, stock options may provide an incentive to...

In this paper, we use empirical analysis to analyze company characteristics associated with the adoption and maintenance of broad-based stock option plans. First, a cross-sectional analysis evaluates what company characteristics are now associated with these plans. Second, a longitudinal...

This paper examines the productivity effect of the adoption of executive and broad-based stock options. The findings include a positive impact on productivity after the introduction of both executive and broad-based stock options. This productivity effect is maintained over a five-year period...

In this paper, we examine if firm size is associated with the impact of broad-based stock options. The free-rider theory would predict that stock options may only have a motivational impact in small firms where there is a more likely to be a clearer connection between actions and the performance...

We examine labor productivity in small, medium, and large firms that broadly distribute stock options under starkly different market conditions - during the bull (1995-1997) and bear (2000-2002) stock markets. We find greater labor output in both upward and downward markets in all firm size...