Employee Stock Options in Germany
An exploratory study of employees’ perceptions on their use and effectiveness
- Art: MA-Thesis / Master
- Autor: Nadia Dirks
- Abgabedatum: August 2003
- Umfang: 88 Seiten
- Dateigröße: 935,2 KB
- Note: 1,0
- Institution / Hochschule: Tilburg University Niederlande
- ISBN (eBook): 978-3-8324-7298-6
-
ISBN (Paperback) :
978-3-8324-7298-6 P - ISBN (CD) :978-3-8324-7298-6 CD
- Sprache: Englisch
- Prämierung:
- Arbeit zitieren: Dirks, Nadia August 2003: Employee Stock Options in Germany, Hamburg: Diplomica Verlag
- Schlagworte: stock options, compensation, Agency Theory, Human Resource Management, remunaration
In den Warenkorb
74,00 €
MA-Thesis / Master von Nadia Dirks
Abstract:
Companies located all around the world increasingly utilize stock options as a means of compensation for employees. Despite their widespread use it is still unknown why employee stock option plans are adopted, how their effectiveness is defined, and what influences their effectiveness. This master’s thesis reports on an exploratory study undertaken on a sample of employees of the German IT company Network Appliance GmbH intended to answer exactly these questions.
The aim of this study was to explore in an in-depth, descriptive fashion, the perspectives of employees receiving stock options as part of their compensation as they are as participants in the process - best situated to provide insights into the practical implications on the use and effectiveness of employee stock options. The qualitative methodology of the study allowed for the opinions and experiences of the employees to be heard and a rich picture of their perceptions on employee stock options was attained. The qualitative content analysis revealed a number of goals, which are associated with employees’ perceptions on why employee stock options are a part of their compensation, and which factors influence these goals’ effectiveness. An exploratory model of the use and effectiveness of employee stock options has been deducted from these findings, which enables managers and researchers to obtain a better understanding of this means of compensation.
Even though research on compensation structures is typically explained by agency theory, the findings of this thesis suggest that no single theory provides a comprehensive explanation of the use and effectiveness of ESOs. Although the existence of a gap between employee and shareholder interests may lead some companies to adopt an employee stock option plan as suggested by agency theory, it is unlikely to be the only reason. Reality seems to be more complex than anticipated by guiding theory in this stream of research, therefore this study suggests that several theoretical frameworks complementing each other, such as human resource management, social exchange, tournament, social comparison, expectancy, managerial discretion, an institutional theory, are needed to fully grasp the use and effectiveness of employee stock options.
Table of Contents:
| Management Summary | II | |
| References | III | |
| Table of Contents | VIII | |
| 1. | Introduction | 1 |
| 1.1 | Introduction | 1 |
| 1.2 | Problem indication | 1 |
| 1.3 | Problem | 2 |
| 1.4 | Research questions | 2 |
| 1.5 | Structure of the thesis | 3 |
| 2. | Employee stock options | 4 |
| 2.1 | Introduction | 4 |
| 2.2 | What are employee stock options? | 4 |
| 2.3 | Types of ESOs | 5 |
| 2.4 | Origins of ESOs | 6 |
| 2.5 | ESOs in international markets | 7 |
| 2.6 | ESOs in the German market | 9 |
| 2.7 | The fiscal situation for ESOs in Germany | 9 |
| 2.7.1 | Taxation of the employee | 10 |
| 2.7.2 | Tax deduction in the company | 10 |
| 2.8 | Case study Network Appliance | 11 |
| 2.8.1 | ESOs at Network Appliance GmbH | 12 |
| 2.8.2 | Outline of the stock option plan | 12 |
| 2.9 | Conclusion | 13 |
| 3. | Theories explaining the use of ESOs | 15 |
| 3.1 | Introduction | 15 |
| 3.2 | Agency theory as the traditional explanation | 15 |
| 3.2.1 | The two typical agency problems | 16 |
| 3.2.2 | Agency theory and ESOs | 17 |
| 3.3 | Non-traditional explanations | 18 |
| 3.3.1 | Human resource management theory | 18 |
| 3.3.2 | Social exchange theory | 19 |
| 3.3.3 | Tournament theory | 20 |
| 3.3.4 | Social comparison theory | 21 |
| 3.3.5 | Expectancy / Managerial discretion theory | 22 |
| 3.3.6 | Institutional theory | 23 |
| 3.4 | Conclusion | 23 |
| 4. | Research design | 25 |
| 4.1 | Introduction | 25 |
| 4.2 | Research method | 25 |
| 4.3 | Sample of participants | 26 |
| 4.4 | Data collection | 26 |
| 4.5 | Operationalization | 27 |
| 4.5.1 | Structure of the questionnaire | 28 |
| 4.5.2 | Translation technique | 28 |
| 4.6 | Summary | 29 |
| 5. | Research results | 30 |
| 5.1 | Introduction | 30 |
| 5.2 | Characteristics of the sample | 30 |
| 5.3 | Data analysis | 31 |
| 5.3.1 | Methodology | 31 |
| 5.3.2 | Reliability and validity | 33 |
| 5.3.2.1 | The three types of reliability | 33 |
| 5.3.2.2 | The two types of construct validity | 34 |
| 5.4 | Findings and interpretation | 35 |
| 5.4.1 | ESOs as a retention tool | 35 |
| 5.4.2 | ESOs as a motivation tool | 37 |
| 5.4.3 | ESOs as a tool to minimize costs | 38 |
| 5.4.4 | ESOs as a recognition tool | 41 |
| 5.4.5 | ESOs as competitiveness tool | 42 |
| 5.4.6 | ESOs as an engagement tool | 43 |
| 5.4.7 | ESOs as a tool to control shareholders | 44 |
| 5.4.8 | ESOs as a market requirement | 45 |
| 5.4.9 | Seldom-mentioned reasons | 46 |
| 5.5 | Summary | 46 |
| 6. | Conclusions and recommendations | 48 |
| 6.1 | Introduction | 48 |
| 6.2 | Conclusions | 48 |
| 6.3 | Implications for managers | 51 |
| 6.4 | Limitations and further research suggestions | 53 |
| References | 54 | |
| Appendices: | ||
| Questionnaire (English version) | 59 | |
| Questionnaire (German version) | 66 | |
| Tables 1 – 10: Ranking and rating of goals 1 - 8 | 73 | |
| Cohen’s Kappa estimations | 77 |
In den Warenkorb
74,00 €
Link zur Arbeit:
http://www.diplom.de/ean/9783832472986
Arbeit zitieren:
Dirks, Nadia August 2003: Employee Stock Options in Germany, Hamburg: Diplomica Verlag
Schlagworte:
stock options, compensation, Agency Theory, Human Resource Management, remunaration
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