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

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  • 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. Thomas Rapp & Nicolas Aubert, 2011. "Bank Employee Incentives and Stock Purchase Plans Participation," Journal of Financial Services Research, Springer, Springer, vol. 40(3), pages 185-203, December.
  2. Dong Lee, 2009. "How Do Employees View Their Underwater Stock Options?: Evidence from the Stock Option Exchange Program," Journal of Financial Services Research, Springer, Springer, vol. 35(3), pages 273-296, June.
  3. Sautner, Zacharias & Weber, Martin, 2005. "Stock Options and Employee Behavior," Sonderforschungsbereich 504 Publications, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim 05-26, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
  4. Hibbert, Ann Marie & Lawrence, Edward R. & Prakash, Arun J., 2013. "Does knowledge of finance mitigate the gender difference in financial risk-aversion?," Global Finance Journal, Elsevier, vol. 24(2), pages 140-152.
  5. Alexander Klos & Martin Weber, 2006. "Portfolio Choice in the Presence of Non-Tradable Income: An Experimental Analysis," German Economic Review, Verein für Socialpolitik, Verein für Socialpolitik, vol. 7, pages 427-448, November.
  6. 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, HAL halshs-00188518, HAL.
  7. Philippe Desbrières, 2002. "Les actionnaires salariés," Working Papers CREGO, Université de Bourgogne - CREGO EA7317 Centre de recherches en gestion des organisations 1021101, Université de Bourgogne - CREGO EA7317 Centre de recherches en gestion des organisations.

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