The paper presents the findings of a research on the design of stock option plans and the risk of expropriation of minority shareholders among Italian companies with concentrated ownership. In such a context, managers are more likely to extract rents through excess compensation and the design of SOPs could acerbate the so-called agency conflict type II (controlling shareholder versus minorities). We empirically assess whether the SOPs with certain characteristics (short vesting period, absence of lock-up period, lack of indexation mechanisms) are associated with the extraction of private benefits at the expense of minority shareholders. We find that the presence of a vesting period of more than three years significantly and positively affects the risk of expropriation. Our results may provide further insights for all listed companies having a concentrated ownership, and a high risk of expropriation of minority shareholders.

Stock option plans and the risk of expropriation. Empirical evidence from the Italian setting / Arena, Claudia; Catuogno, Simona; Cirillo, Alessandro; Mussolino, Donata; Pulcinelli, Ingrid; Saggese, Sara; Sarto, Fabrizia. - (2014), pp. 49-53. (Intervento presentato al convegno 2nd International Virtual Scientific Conference ScieConf2014 nel 9-13 giugno 2014).

Stock option plans and the risk of expropriation. Empirical evidence from the Italian setting

Arena Claudia;Catuogno Simona;Mussolino Donata;Pulcinelli Ingrid;Saggese Sara;Sarto Fabrizia
2014

Abstract

The paper presents the findings of a research on the design of stock option plans and the risk of expropriation of minority shareholders among Italian companies with concentrated ownership. In such a context, managers are more likely to extract rents through excess compensation and the design of SOPs could acerbate the so-called agency conflict type II (controlling shareholder versus minorities). We empirically assess whether the SOPs with certain characteristics (short vesting period, absence of lock-up period, lack of indexation mechanisms) are associated with the extraction of private benefits at the expense of minority shareholders. We find that the presence of a vesting period of more than three years significantly and positively affects the risk of expropriation. Our results may provide further insights for all listed companies having a concentrated ownership, and a high risk of expropriation of minority shareholders.
2014
978-80-554-0891-0
Stock option plans and the risk of expropriation. Empirical evidence from the Italian setting / Arena, Claudia; Catuogno, Simona; Cirillo, Alessandro; Mussolino, Donata; Pulcinelli, Ingrid; Saggese, Sara; Sarto, Fabrizia. - (2014), pp. 49-53. (Intervento presentato al convegno 2nd International Virtual Scientific Conference ScieConf2014 nel 9-13 giugno 2014).
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11588/715765
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