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

Afzal Ahmad
Afzal Ahmad * § MBA in Accounting
§ International Islamic University Chittagong

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

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Abstract

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.

References

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

How to Cite This Article

Afzal Ahmad. 2015. "Executive Stock Option Contract Increases Firm Value and Performance: A Case Study on Starbucks Company". 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

Keywords
Classification
GJMBR-C Classification JEL Code: H54
Version of record

v1.2

Issue date
September 14, 2015

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

Afzal Ahmad
Afzal Ahmad International Islamic University Chittagong