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 …

Employee compensation may impact payout policy by (i) incentivizing managers with non-dividend-protected options to … upon a causal relation between equity compensation and payout. We examine this relation in light of the shift from options … to restricted stock. Our results strongly support a positive relation between compensation and share repurchases via the …

This paper reviews the theory and evidence for agency theory-based explanations for employee stock ownership plans … found in the financial participation literature. The UK Workplace Employee Relations Survey 1998 is used to test whether …