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Selling Company Shares to Reluctant Employees: France Telecom's Experience

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  • Francois Degeorge
  • Dirk Jenter
  • Alberto Moel
  • Peter Tufano

Abstract

In 1997, France T‚l‚com, the state-owned French telephone company, went through a partial privatization. The government offered current and prior France T‚l‚com employees the opportunity to buy portfolios of shares with various combinations of discounts, required holding periods, leverage, tax treatment, 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 database that tracks over 200,000 eligible participants, we analyze the employees' characteristics and their decisions whether to participate; how much to invest; and what form of stock alternatives they selected.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7683.

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Date of creation: May 2000
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Publication status: published as Degeorge, Francois & Jenter, Dirk & Moel, Alberto & Tufano, Peter, 2004. "Selling company shares to reluctant employees: France Telecom's experience," Journal of Financial Economics, Elsevier, vol. 71(1), pages 169-202, January.
Handle: RePEc:nbr:nberwo:7683

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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, HAL halshs-00188518, HAL.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.

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