Executive Stock Options: Will it Work as a Good Governance Mechanism in all Scenarios?

Preet Singh and Chitra Singla ()

Working Papers from eSocialSciences

Abstract: In this paper, it is contended that ESoPs will not work as a good governance or mitigation mechanism in all types of firms. ESoPs can be an effective mitigation mechanism for a firm with dispersed ownership but it might not be the case for a firm with majority or block shareholding. This study extends the argument for ESoPs given to board members as well. It presents a framework to understand when it makes sense for a firm to incentivise top management with ESoPs [W.P. No. 2016-03-55]

Keywords: Executive Stock Options; Good Governance Mechanism; mitigation mechanism; Primary Agency Theory (search for similar items in EconPapers)
Date: 2016-06
Note: Institutional Papers
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Working Paper: Executive Stock Options: Will It Work as a Good Governance Mechanism in all Scenarios? (2016)
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