The book investigates empirically mechanisms behind the recent widespread use of employee stock
options and share repurchases in corporate financial management. Exploring through econometric
models a sample of large U.S. technology corporations in the period between 1997 and 2005 it
documents complex links between stock option plans payout policy and other key financial
characteristics of these firms. The models highlight the interplay between the interests of
long-term shareholders optionholders and speculative investors and provide estimates of joint
effects of option dynamics and repurchases on stock returns undervaluation and option plans on
payout policy as well as risk taking and revenue growth on payoffs to shareholders and
optionholders.
