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Annals of Management Science

Abstract

In this paper, we introduce a new type of employee stock options – dynamic employee stock options (DESOs). A cost-benefit analysis of DESOs is conducted against traditional employee stock options (TESOs). The results indicate that DESOs have many advantages over TESOs while they only cost the firm 4% more. We suggest that firms should choose DESOs over TESOs for the best interests of both the employers and the employees.

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