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

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

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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File URL: http://www.hec.fr/var/fre/storage/original/application/5a06ab56fe14c0c6b1899d0962a5d9e5.pdf
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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
Contact details of provider: Postal: HEC Paris, 78351 Jouy-en-Josas cedex, France
Web page: http://www.hec.fr/

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