Do employees view stock options the same way their bosses do?

Deskripsi

While stock options boosted productivity in all firms, executive-level options generated twice the productivity gains (measured by sales per employee) compared to broad-based employee plans. Executives viewed options as long-term motivators, aligning their interests with company success and fostering investments in R&D. In contrast, non-managerial employees treated options as short-term bonuses, exercising them quickly, with diminishing effects on retention and performance. The study challenges assumptions about uniform motivational benefits of stock options, emphasizing that frequent issuance is critical for broad-based plans to sustain employee engagement.