NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Selling Company Shares to Reluctant Employees: France Telecom's Experience

Francois Degeorge, Dirk Jenter, Alberto Moel, Peter Tufano

NBER Working Paper No. 7683
Issued in May 2000
NBER Program(s):   CF

In 1997, France T‚l‚com, the state-owned French telephone company, went through a partial privatization. The government offered current and prior France T‚l‚com employees the opportunity to buy portfolios of shares with various combinations of discounts, required holding periods, leverage, tax treatment, and levels of downside protection. We adapt a neoclassical model of investment decision-making that takes into account firm-specific human capital and holding period restrictions to predict how employees might respond to the share offers. Using a database that tracks over 200,000 eligible participants, we analyze the employees' characteristics and their decisions whether to participate; how much to invest; and what form of stock alternatives they selected.

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Published: Degeorge, Francois & Jenter, Dirk & Moel, Alberto & Tufano, Peter, 2004. "Selling company shares to reluctant employees: France Telecom's experience," Journal of Financial Economics, Elsevier, vol. 71(1), pages 169-202, January.

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