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Why Do Some Firms Give Stock Options to All Employees?
National Bureau of Economic Research [NBER] 
Jan. 13, 2004
Excerpt: Many firms issue stock options to all employees. We consider three potential economic justifications for this practice: providing incentives to employees, inducing employees to sort, and helping firms retain employees. We gather data on firms' stock option grants to middle managers from three distinct sources, and use two methods to assess which theories appear to explain observed granting behavior.
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