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

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

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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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
Note: CF
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