The impact of stock-options on the company’s financial performance

Abstract

During the last decade, the development of stock-options as a compensation tools, let us ask about their effects

on firms, especially on the financial performance and cash flows. Our study is based on a sample that covers the

companies listed on SBF 250 in a period from 2006 to 2011, with a total of 504 observations. In fact, our

research methodology is to test our model on two panels, panel A based on operating results (OPINC) and panel

B referring to cash flows (CFO). Also, we incorporate a dummy variable which is the number of stock-options

"NB" in the model to achieve our paper’s object .Thanks to the model of Aboody, Johnson and Kasznik (2010);

we concluded a positive relationship between the number of stock-options and the financial performance of

publicly traded companies. Moreover, we found an absence of the impact of the repricing on future business

performance. These results were consistent with the study by Carter and Lynch (2004). But this coefficient was

significative and positive related to cash-flows, which has been affirmed by Honlon et al (2003).