The effects of profit-sharing distributions on employee stock purchase plan participation
IntroductionFirms use various forms of equity-based compensation to allow employees to participate in their success.MethodsWe examine how an unannounced profit-sharing distribution (PSD) affects participation in Employee stock purchase plans (ESPPs), which offer discounted shares. Using panel data f...
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| Format: | Article |
| Language: | English |
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Frontiers Media S.A.
2025-02-01
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| Series: | Frontiers in Behavioral Economics |
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| Online Access: | https://www.frontiersin.org/articles/10.3389/frbhe.2024.1484468/full |
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| author | Jan C. Hennig Rieke Hullmann Holger A. Rau Michael Wolff |
| author_facet | Jan C. Hennig Rieke Hullmann Holger A. Rau Michael Wolff |
| author_sort | Jan C. Hennig |
| collection | DOAJ |
| description | IntroductionFirms use various forms of equity-based compensation to allow employees to participate in their success.MethodsWe examine how an unannounced profit-sharing distribution (PSD) affects participation in Employee stock purchase plans (ESPPs), which offer discounted shares. Using panel data from a multinational firm, we find counterbalancing effects of the PSD.ResultsWhile it attracts new participants to the ESPP, a similar share of former participants exit the program after receiving the distribution. This latter effect is particularly pronounced in countries characterized by higher average levels of prosociality.DiscussionOur findings suggest that unexpected profit sharing can have heterogeneous effects on ESPP participation across different cultural contexts. |
| format | Article |
| id | doaj-art-8ce8d7d5ac454461b155b06773917c93 |
| institution | Kabale University |
| issn | 2813-5296 |
| language | English |
| publishDate | 2025-02-01 |
| publisher | Frontiers Media S.A. |
| record_format | Article |
| series | Frontiers in Behavioral Economics |
| spelling | doaj-art-8ce8d7d5ac454461b155b06773917c932025-02-04T06:32:07ZengFrontiers Media S.A.Frontiers in Behavioral Economics2813-52962025-02-01310.3389/frbhe.2024.14844681484468The effects of profit-sharing distributions on employee stock purchase plan participationJan C. Hennig0Rieke Hullmann1Holger A. Rau2Michael Wolff3Faculty of Economics and Business, University of Groningen, Groningen, NetherlandsFaculty of Business and Economics, University of Göttingen, Göttingen, GermanyFaculty of Business and Economics, University of Göttingen, Göttingen, GermanyFaculty of Business and Economics, University of Göttingen, Göttingen, GermanyIntroductionFirms use various forms of equity-based compensation to allow employees to participate in their success.MethodsWe examine how an unannounced profit-sharing distribution (PSD) affects participation in Employee stock purchase plans (ESPPs), which offer discounted shares. Using panel data from a multinational firm, we find counterbalancing effects of the PSD.ResultsWhile it attracts new participants to the ESPP, a similar share of former participants exit the program after receiving the distribution. This latter effect is particularly pronounced in countries characterized by higher average levels of prosociality.DiscussionOur findings suggest that unexpected profit sharing can have heterogeneous effects on ESPP participation across different cultural contexts.https://www.frontiersin.org/articles/10.3389/frbhe.2024.1484468/fullemployee stock purchase plansprofit sharingfinancial incentivesintrinsic motivationsocial preferences |
| spellingShingle | Jan C. Hennig Rieke Hullmann Holger A. Rau Michael Wolff The effects of profit-sharing distributions on employee stock purchase plan participation Frontiers in Behavioral Economics employee stock purchase plans profit sharing financial incentives intrinsic motivation social preferences |
| title | The effects of profit-sharing distributions on employee stock purchase plan participation |
| title_full | The effects of profit-sharing distributions on employee stock purchase plan participation |
| title_fullStr | The effects of profit-sharing distributions on employee stock purchase plan participation |
| title_full_unstemmed | The effects of profit-sharing distributions on employee stock purchase plan participation |
| title_short | The effects of profit-sharing distributions on employee stock purchase plan participation |
| title_sort | effects of profit sharing distributions on employee stock purchase plan participation |
| topic | employee stock purchase plans profit sharing financial incentives intrinsic motivation social preferences |
| url | https://www.frontiersin.org/articles/10.3389/frbhe.2024.1484468/full |
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