How Do Employees View Their Underwater Stock Options?: Evidence from the Stock Option Exchange Program
- Authors
- Lee, Dong Wook
- Issue Date
- 6월-2009
- Publisher
- SPRINGER
- Keywords
- Non-executive employees; Employee stock options; Stock option exchange program; 6& 1 repricing; Participation decisions
- Citation
- JOURNAL OF FINANCIAL SERVICES RESEARCH, v.35, no.3, pp.273 - 296
- Indexed
- SCIE
SCOPUS
- Journal Title
- JOURNAL OF FINANCIAL SERVICES RESEARCH
- Volume
- 35
- Number
- 3
- Start Page
- 273
- End Page
- 296
- URI
- https://scholar.korea.ac.kr/handle/2021.sw.korea/119873
- DOI
- 10.1007/s10693-009-0053-z
- ISSN
- 0920-8550
- Abstract
- This paper examines the participation decisions of employees in a stock option exchange program aimed at restoring value to underwater options. The program invites employees to exchange their existing underwater options for new options, the value of which is determined by the company stock price in 6 months and 1 day. The participation turns out to vary cross-sectionally and, perhaps surprisingly, the employees do not surrender all their underwater options. We find that employees actively and rationally consider a variety of factors to make their participation decisions, rather than blindly surrendering their underwater options. The participation decisions of non-executive employees seem to be well anticipated by stock market investors, since no abnormal stock returns are related to the participation decisions.
- Files in This Item
- There are no files associated with this item.
- Appears in
Collections - Korea University Business School > Department of Business Administration > 1. Journal Articles
Items in ScholarWorks are protected by copyright, with all rights reserved, unless otherwise indicated.