A Numerical Model of ESO Grants Under Different Regulatory Regimes and Share Repurchase Strategies

• Autorzy: Wojciech Grabowski
• Języki publikacji: PL

Abstrakty

EN

In recent years employee stock options (ESO) became both a widely adopted compensation instrument and a subject of controversy related to the methods of their valuation, their accounting treatment and their effect on other key elements of the corporate financial policy. The results of several empirical studies documented a close link between share repurchases and ESO grants [see e.g. Fenn and Liang (2001), Kahle (2002), Bens et al. (2003) and Larcker (2003)1. This paper contributes to the existing literature by examining this link in a quantitative model which takes into account the regulatory differences in the ESO treatment in various jurisdictions. In such a framework both the regulatory and financial management determinants influencing corporate ESO grants may be analyzed at the same time. The ability to perform such analysis is particularly relevant in view of the recent introduction of the new accounting standards for share-based compensation in the European Union and in the United States. The next section develops a stochastic model to study the influence of regulatory environment and repurchase strategy on ESO grant decisions. Section 3 presents and discusses the results of two numerical experiments obtained with the model. Section 4 concludes. (fragment of text)

Słowa kluczowe

PL

Opcje na akcje dla pracowników

EN

Employee stock options

• Czasopismo: Ekonomia / Uniwersytet Warszawski
• Rocznik: 2007
• Numer: nr 18
• Strony: 133--141

Twórcy

autor

Wojciech Grabowski

• University of Warsaw

Bibliografia

• Bons D.A., V. Nagar, D.J. Skinner, M.H. Franco Wong, 2003. "Employee stock options, EPS dilution and stock repurchases", Journal of Accounting and Economics 36, 51-90.
• Fenn G.W., Liang N., 2001. "Corporate payout policy and managerial stock incentives". Journal of Financial Economics 60, 45-72.
• Grabowski W. 2005. "How important are the tax and accounting determinants of corporate ESO strategy?". Ekonomia 15, 183-188.
• Grabowski W., 2006. "Employee share option valuation models". Ekonomia 16, 151-156.
• Hall, B.J., K.J. Murphy. 2002. "Stock options for undiversified executives". Journal of Accounting and Economics 33, 3-42.
• Kahle K.M., 2002. "When a buyback isn't a buyback: open market repurchases and employee options". Journal of Financial Economics 63, 235-261.
• Larcker D.F., 2003. "Discussion of'Employee stock options, EPS dilution and stock repurchases"', Journal of Accounting and Economics 36, 45-49.
• Oyer P., S. Schaefer, 2006. "Costs of broad-based stock option plans". Journal of Fi nancial Intermediation 15, 511-534.