Les Cahiers de Recherche - HEC Paris
François DEGEORGE, Dirk JENTER, Alberto MOEL and Peter TUFANO
Selling company shares to reluctant employees : France Télécom's experience
Abstract: In 1997, France Télécom, the French telecommunications
firm, went through a partial privatization or Opening of Shareholding. As
part of this process, the government offered current and prior France
Télécom employees the opportunity to buy portfolios of shares with various
combinations of discounts, required holding periods, 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 new database that tracks over 200,000 eligible participants, we
analyze the employees' characteristics and their decisions regarding (a)
whether to participate; (b) how much to invest; and (c) what form of stock
alternatives they selected.
Keywords: Privatization; human capital; France Telecom; employee ownership; portfolio choice; (follow links to similar papers)
JEL-Codes: E69; G18; G32; L32; (follow links to similar papers)
55 pages, April 24, 2000
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