Analysis of The Influence of Employee Stock Ownership Program (ESOP) Application of Company Financial Performance

Fitri Handayani, Yurniwati Yurniwati

Abstract


This study aims to examine the effect of implementing the Employee Stock Ownership Program (ESOP) on the company's financial performance. and differences in the company's financial performance when issuing ESOPs and not issuing ESOPs. The implementation of ESOP is proxied by the proportion of ESOP and the price of execution, the company's financial performance is proxied by ROE, NPM, and OPM. The research was conducted on companies listed on the IDX and have adopted the ESOP in 2012 to 2016. The sampling method uses purposive sampling. To test the effect of applying ESOP on performance. The results of this study indicate that the number of ESOP Provisions given has no effect on ROE, NPM, and OPM. ESOP execution prices affect the value of ROE and NPM but do not affect the value of OPM. There is no difference in the value of ROE, NPM, and OPM when the company issues ESOP and does not issue ESOP.

Keywords


Employee Stock Ownership Program (ESOP); Execution Price; Company Financial Performance

Full Text:

PDF

References


Aboody, David. Nicole Bastian Johnson. and Ron Kasznik. 2010. Employee Stock Options and Future Firm Performance: Evidance from Option Repricings. Journal of Accounting and Economics, Vol 50, 74-92

Anwar, Azwar. Zaki Baridwan. 2006. Effects of Employee Stock Option Plans (ESOPs) to Performance and Firm Value: Empirical Study at JSX. 9th National Accounting Symposium Padang

Anthony, Robert N. Vijay Govindarajan. 2004. Mangement Control System. Jakarta. Salemba Empat

Astika, Ida Bagus Putra. 2005. Benefits and Factors that Influence the Adoption of Stock Option Programs in Public Companies Listed on the Jakarta Stock Exchange. Journal of Accounting, Faculty of Economics, Udayana University

Bacha, Obiyatulla Ismath. Sharifah Raihan Syed Mohd Zein. Et al. 2009. Granting Employee Stock Options (ESOs), Market Reaction and Financial Performance. Asian Academy of Management Joutnal of Accounting and Finance. Vol 5 No. 1, pp. 117-138

Bapepam 2002. "Study on the Implementation of ESOPs of Public Companies in the Indonesian Capital Market." finance department of the Republic of Indonesia

Bathala, Chenchuramaiah T. Kenneth O Moon. Ramesh P Rao. 1994. Managerial Ownership, Debt Polivy, and the Impack of Institutional Holding: An Perspective Agency. International Financial Management Association. Vol 23. No 3. Pp 38-50

Bodie, Zvi. Alex Kane. Alanj Marcus. 2006. Investment; Investation. Jakarta. Salemba Empat

Budiman, Arip. 2017. The Effect of Execution Price and ESOP on Company Performance with Managerial Ownership Moderation. Journal of Accounting and Research. Vol6. No. 7

Brigham, Eugene F. Michael C. Ehrhardt. 2009. Financial Management: Theory and Practice Twelfth Edition. The USA. Thomson South Western.

Eisenhardt, Kathleen M. 1989. Agency Theory: An Assessment and Review. Academy of Management Review. Vol 14. No 1. pp 57-74

Elton, Edwin J. Martin J Gruber. et al. 2014. Modern Portfolio Theory And Investment Analysis. The USA. John Wiley

Freeman, Steven. 2007. Effect of ESOP Adoption and Employee Ownership: Thirty Years of Research and Experiance. Organinizational Dynamic Working Paper. 7-01

Ghozali, Imam. 2011. Application of Multivariate Analysis with IBM SPSS 19. Semarang Program. Diponegoro University Publisher Agency

Gitman, Lawrence J. 2009. Principles of Managerial Finance. Boston. Pearson Prentice Hall

Hasibuan. SP Malayu. 2012. Human Resource Management. Jakarta. Earth Literacy

Indonesian Institute of Accountants. 2015. Statement of Financial Accounting Standards (PSAK) No 53 Stock Based Payments. Jakarta

Iqbal, Z. And HS Abdul. 2000. Stock Price and Operating Performance of ESOP Firms: A Time-Series Analysis. Quarterly Journal of Business and Economics. Vol 39. No 3. pp 25-47

Jensen, Michael. William Meckling. 1976. Theory of The Firm: Managerial Behavior, Agency Cost and Ownership Structure. Journal of Financial Economics. Vol 52. No 4

Kameswari, Luh Putu Lisa Anastasia. Ida is good, Putra Astika. 2014. Effect of Number of Stock Options and Price of Execution on Company Performance. EJournal of Udayana University Accounting

Keown, Arthur J. John D Martin. et al. 2010. Financial Management: Principles and Their Application. Jakarta. PT Index

Kim, Kyong Yong. 2016. Employee Ownership and Firm Performance: A Variance Decomposition Analysis of European Firms. Journal of Business

Klein, Katherine J. 1987. Employee Stock Ownership and Employee Attitudes: A Test of Three Models. Journal of Applied Psychology Monograph. Vol 72. No. 2. 319-332

Long, Choi Sang. Mahanra Rao. and Ajagbe Akintunde Musibau. 2013. Can Employee share Option Scheme Improve Firm's Performance? A Malaysian Case Study. Information Management and Business Review. Vol 5. No 3, pp. 119-128

Messier, William F. Steven M Glover. Douglas F Prawitt. 2005. A Systematic Auditing and Assurance Service. Jakarta. Salemba Empat

Pandansari, Ghea Maharani. 2010. Comparative Analysis of Company Performance Before and After Holding an Employee Stock Ownership Program (Esop) with Companies Not Holding Esop. Thesis. Surakarta sebelas Maret University

Bapepam Regulation No. IX D.4 concerning Issuance of Shares without Pre-emptive Rights is accessed on www.ojk.go.id

Bapepam Regulation No.IX.A.7 concerning Securities Allotment in Public Offering is accessed at www.ojk.go.id

Pugh, William N. Sharon L. Oswald and John S. Jahera 2000. The Effect of ESOP Adoption on Corporate Performance: Are There Really Performance Change? ". Journal of Managerial and Economic. Vol 21: 167-180

Santhy, Rayhita. IB Putra Astika. 2015. Differences in Company Performance Before and After Employee Stock Option Plan Grants. Ejournal of Accounting at Udayana University

Now, Uma. 2011. Research Method for Business Issue 4. Jakarta. Salemba Empat

Sesil, James C. Maya K Kroumova. 2005. The Impact of Broad Stock Based Options on Firm Performance: Does Firm Size Matter? Working Paper

Subramanyam, KR John J Wild. 2009. Financial Statement Analysis. McGraw-Hill International Edition. The USA. McGraw Hill

Raymond A. Noe. (2011). Fundamentals of Human Resource Management. The USA. McGrawhill Irwin.

Watt, Ross L. Jerold L. Zimmerman. 1990. Positive Accounting Theory: A Ten Years Perspective. The Accounting Review. Vol 65. No 1. pg 131




DOI: http://dx.doi.org/10.33087/jiubj.v20i2.978

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

ADRESS JOURNAL

JURNAL ILMIAH UNIVERSITAS BATANGHARI JAMBI (JIUBJ)
Published by Lembaga Penelitian dan Pengabdian kepada Masyarakat
Adress: Jl.Slamet Ryadi, Broni-Jambi, Kec.Telanaipura, Kodepos: 36122, email: jiubj.unbari@gmail.com, Phone: 0741-670700

Creative Commons License This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.