Out of the Money: The Impact of Underwater Stock Options on Executive Job Search
By Wendy R. Boswell, Benjamin Dunford, John W. Boudreau
Spring, 2005
Personnel Psychology, Vol. 58, pp. 67
Abstract
The need for future leadership in organizations is widely recognized, and often addressed through leadership development, succession planning and building a top talent pipeline among existing employees. Equally important is retaining talented executives. Executive retention has become a concern for organizations as plunging stock prices have led to vastly devalued stock options, perhaps causing executives to look elsewhere for more lucrative stock option portfolios. Yet there has been little research on the relationship between stock option value and executive retention. In a cross-company, cross-industry sample of 610 U.S. executives, we explored the relationship between underwater stock options and job search. We found a positive association between the percentage of underwater stock options in executives' portfolios and job search. This relationship was moderated, as predicted, by executives' perceptions of alternative employment and money inadequacy beliefs.
Keywords
Employee Retention, Job Search, Stock Options
More from Wendy R. Boswell…
More from Department of Management…