Excerpt: This study investigates the effects of attraction, retention, and incentive objectives on the organization-wide use of two non-cash pay elements: benefits and broad-based equity (stock and stock option) grants. Recent economic theories lead to conflicting implications for the use of various non-cash pay elements in achieving these objectives. Data from the European operations of 185 large firms indicate that benefits are primarily provided for retention purposes. Broad-based option grant eligibility is positively associated with incentive and attraction purposes, but negatively associated with retention objectives, despite claims that options' vesting provisions enhance their retention advantages. Stock grant eligibility is also positively associated with incentive objectives, but has little relation with either attraction or retention objectives.

MORE >>