The Relationship between Employee Stock Options and Company Risks

• Main Authors: CHIEH-HUNG CHUNG, 鍾杰紘
• Other Authors: 林修葳
• Format: Others
• Language: en_US
• Published: 2015
• Online Access: http://ndltd.ncl.edu.tw/handle/19802450682689217576

碩士 === 國立臺灣大學 === 國際企業學研究所 === 103 === Employee stock options have already become one of the popular tools for companies to grant their employees as compensations, thereby attracting more and more research papers examining on it. However, most of the extant papers focus on the valuation and exercise-decision of the employee stock option. This thesis turns to the company’s risk with the association of the employee stock options. The results show that there exists a significantly positive relationship between the company risk and the employee stock options, which leads to the interpretation that the companies tend to take greater risk since the increase of company risks helps increasing the value of the options. The tests are also applied to those of restricted stocks, which posses same characteristics as those of employee stock options. The tests also indicate that there is positive relationship between restricted stocks and company risk. Furthermore, this thesis analyzes the relationship of employee stock options with unsystematic risks, which offer no compensations to undertakers. The empirical results indicate that there is statistically significantly positive relationship between either the numbers or values of employee stock options and the unsystematic risk of the company, leading to the interpretation that the company undertakes more unsystematic risk, consistent with the notion that stockholders will conduct self-diversification to their investments.