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Selling company shares to reluctant employees : France Télécom's experience

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Author Info

  • DEGEORGE, François
  • JENTER, Dirk
  • MOEL, Alberto
  • TUFANO, Peter

Abstract

In 1997, France Télécom, the French telecommunications firm, went through a partial privatization or Opening of Shareholding. As part of this process, the government offered current and prior France Télécom employees the opportunity to buy portfolios of shares with various combinations of discounts, required holding periods, and levels of downside protection. We adapt a neoclassical model of investment decision-making that takes into account firm-specific human capital and holding period restrictions to predict how employees might respond to the share offers. Using a new database that tracks over 200,000 eligible participants, we analyze the employees' characteristics and their decisions regarding (a) whether to participate; (b) how much to invest; and (c) what form of stock alternatives they selected.

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Bibliographic Info

Paper provided by HEC Paris in its series Les Cahiers de Recherche with number 703.

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Length: 55 pages
Date of creation: 24 Apr 2000
Date of revision:
Handle: RePEc:ebg:heccah:0703

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Postal: HEC Paris, 78351 Jouy-en-Josas cedex, France
Web page: http://www.hec.fr/
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Related research

Keywords: Privatization; human capital; France Telecom; employee ownership; portfolio choice;

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References

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Citations

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Cited by:
  1. Nicolas Aubert, 2006. "Understanding Employer's Stock Holdings in the French Company Savings Plans Using the Literature on the American 401(k) plans," Post-Print halshs-00188518, HAL.
  2. Gomes, Francisco J & Michaelides, Alexander, 2005. "Optimal Life-Cycle Asset Allocation: Understanding the Empirical Evidence," CEPR Discussion Papers 4853, C.E.P.R. Discussion Papers.
  3. Sautner, Zacharias & Weber, Martin, 2005. "Stock Options and Employee Behavior," Sonderforschungsbereich 504 Publications 05-26, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
  4. Alexander Klos & Martin Weber, 2006. "Portfolio Choice in the Presence of Non-Tradable Income: An Experimental Analysis," German Economic Review, Verein für Socialpolitik, vol. 7, pages 427-448, November.
  5. Thomas Rapp & Nicolas Aubert, 2011. "Bank Employee Incentives and Stock Purchase Plans Participation," Journal of Financial Services Research, Springer, vol. 40(3), pages 185-203, December.
  6. Dong Lee, 2009. "How Do Employees View Their Underwater Stock Options?: Evidence from the Stock Option Exchange Program," Journal of Financial Services Research, Springer, vol. 35(3), pages 273-296, June.
  7. Philippe Desbrières, 2002. "Les actionnaires salariés," Working Papers FARGO 1021101, Université de Bourgogne - Leg (laboratoire d'économie et de gestion)/Fargo (Research center in Finance,organizational ARchitecture and GOvernance).

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