 Executive equity incentive plans: Effective golden handcuffs?Baohua Liu, Nihui Zhang, Kam C. Chan, Yining Chen and Xuemei Qiu International Review of Economics & Finance, 2024, vol. 91, issue C, 83-97 Abstract: We examine the impact of executive equity incentive plans (EEIPs) on the retention of targeted (those subject to EEIPs) and non-targeted (those not subject to EEIPs) executives using a sample of Chinese firms. Our findings suggest that EEIPs help retain executives if we do not distinguish targeted and non-targeted executives. Using a difference-in-differences research design, we find that, on average, targeted (non-targeted) executives in EEIP firms have an approximately 16% lower (43% higher) chance of leaving their current jobs than the average turnover rate of executives in a non-EEIP firm. Additional analysis suggests that 1) the golden-handcuff effect on targeted executives occurs primarily in the first two years of EEIPs, while the push-away effect on non-targeted executives lasts for four years, and 2) non-targeted executives are more likely to leave when they have low compensation. Keywords: Executive equity incentive plans; Golden-handcuff effect; Push-away effect; Executive and employee retention; Executive turnover and compensation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:91:y:2024:i:c:p:83-97 DOI: 10.1016/j.iref.2024.01.003 Access Statistics for this article International Review of Economics & Finance is currently edited by H. Beladi and C. Chen More articles in International Review of Economics & Finance from Elsevier |
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