Executive Stock Option Contract Increases Firm Value and Performance: A Case Study on Starbucks Company

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afzal ahmad
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GJMBR Volume 15 Issue C8

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Executive Stock Option Contract Increases Firm Value and Performance: A Case Study on Starbucks Company Banner
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A diversified stock option plan design plays a crucial role in the effectiveness of option contracts management and elimination of the free-rider problem. The aim of this study is to examine how a company can be used stock options in risk management and solving the agency problem rewarding employees and managers. The stock options plans offered by Starbucks engage all employees and executives into the ownership providing appropriate motivation and incentive and solving the agency problem. However, the study found that, this could also trigger more risk taking on the part of the top managers.

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No external funding was declared for this work.

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The authors declare no conflict of interest.

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afzal ahmad. 2015. \u201cExecutive Stock Option Contract Increases Firm Value and Performance: A Case Study on Starbucks Company\u201d. Global Journal of Management and Business Research - C: Finance GJMBR-C Volume 15 (GJMBR Volume 15 Issue C8): .

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Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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GJMBR-C Classification: JEL Code: H54
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v1.2

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September 14, 2015

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English

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A diversified stock option plan design plays a crucial role in the effectiveness of option contracts management and elimination of the free-rider problem. The aim of this study is to examine how a company can be used stock options in risk management and solving the agency problem rewarding employees and managers. The stock options plans offered by Starbucks engage all employees and executives into the ownership providing appropriate motivation and incentive and solving the agency problem. However, the study found that, this could also trigger more risk taking on the part of the top managers.

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Executive Stock Option Contract Increases Firm Value and Performance: A Case Study on Starbucks Company

Afzal Ahmad
Afzal Ahmad

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