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TABLE 1: DEMOGRAPHIC COMPOSITION OF THE SAMPLE (N=200) Gender Male
Female Age
25-35 36-45 46-55 56-65
Ethnicity Black White
Coloured Indian
Oriental
Frequency 133 67
Frequency 18 42 29
111
Frequency 95 82 11 3 9
Percentage 66.5% 33.5%
Percentage 9%
21%
14.5% 55.5%
Percentage 47.5% 41% 5.5% 1.5% 4.5%
The majority of share options recipients were male, over 55 years of age and mainly blacks and whites. Many of these had certificates or diplomas (n=74) while some had degrees and postgraduate qualifications (n=39). Interestingly, only a few (n=84) had completed qualifications where financial management was included as a course. 43% (n=86) of respondents had been with their current company for at least the last 5 years and 27% (n=54) had been with the company for more than 10 years.
The researcher attempted to gauge the attitude and behaviour of the respondents with regard to agency and whether or not there is any consideration on their part of all stakeholders in the managing of their respective organizations. It appears, according to the interviews and the literature reviewed that employees are in favour of share options (Bucko, 1993) and are more likely to be more committed to their work and have a positive attitude as a result thereof (Klein, 1987). For some CEOs, share options are the only meaningful incentives and some of them possess so many shares that they do not believe that they receive more meaningful incentives from variation in their annual pay. This makes it highly improbable that anything other than changes in the share price will indeed motivate the CEOs. (http://knowledge.wharton.upenn.edu/article.cfm?articleid=526). After analyzing the survey sample responses of CEOs (n=200), on the value of share options, it was possible to conclude that they have a number of extrinsic as well as intrinsic values. Some CEOs felt that they were in a position to greatly influence the course of events in the organization due to their shares held (n=58). Others felt that they were proud to be regarded as part-owners of their organizations and had vested interests. Furthermore share options instilled them with a sense of pride and achievement (n=142) and created opportunities for creating long-term capital based wealth (n=127). Some regarded the share options as a ‘savings plan’ (n=71). Some CEOs (n=77) would probably prefer to own shares directly rather than have share options.
Four CEOs did not receive share options and would if give the opportunity seek employment in a company where share options were on offer. Most of them felt pleased about the prospect of greatly increased compensation even though it would be deferred (n=126). Half of those interviewed felt they were more committed and intended to stay with their employer due to the share option plan they had and would need to carefully consider moving to another company (n=102). The majority of CEOs (n=153) felt that share options built a team spirit and served as a motivator to perform well at
ASSESSING CORPORATE GOVERNANCE AND EXECUTIVE REMUNERATION USING SHARE OPTION PLANS 1181