Is the Stock Option Effective to Maintain Key Management? Evidence from Indonesia Listed Companies

DOI

10.2991/aebmr.k.200127.020How to use a DOI?

Keywords

Management stock option, management retention, performance

Abstract

Management stock option is a form of compensation which has a hypothetical function to maintain key management, that in the end, the goal is improving company performance. This study aims to prove the hypothesis using Indonesia listed companies’ data over the 2012–2016 period. The turnover rate measures management retention. The effectiveness of management stock options is examined during the vesting and exercised period, while management stock options are measured in three ways, i.e., a dummy of the existence of stock option, the amount of stock option, and the number of shares that are offered as stock options. Management stock options are found limited in Indonesia listed companies. Overall, the results showed that granting management stock options are only useful in retaining the management only during the vesting period. This study contributes to the remuneration and nomination committee in regulating the optimal management stock options.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Y.K. Feliana
AU  - F. Lianggono
PY  - 2020
DA  - 2020/01/31
TI  - Is the Stock Option Effective to Maintain Key Management? Evidence from Indonesia Listed Companies
BT  - Proceedings of the 17 th International Symposium on Management (INSYMA 2020)
PB  - Atlantis Press
SP  - 98
EP  - 103
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200127.020
DO  - 10.2991/aebmr.k.200127.020
ID  - Feliana2020
ER  -