THE EFFECT OF EMPLOYEE STOCK OWNERSHIP PLAN TOWARDS INDONESIAN PUBLIC COMPANY PROFITABILITY

• Main Author: Anjani, Winona
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/24733
• Institution: Institut Teknologi Bandung

Employee Stock Ownership Plan, or, ESOP is a human resource management program by giving proportion of company stock to the employee. Many previous researches showed mixed results between ESOP and company financial performance. Hence, this research is addressed to analyze the relationship of company’s profitability with ESOP implementation. There are 3 profitability ratios which are set as variable measurement. They are ROA (Return on Asset), ROE (Return on Equity), NPM (Net Profit Margin) from 2008-2015. The data population is only for listed companies in Indonesia Stock Exchange. The source of data is collected from IDX. This study uses purposive sampling with defined criteria that result 7 qualified companies as sample. Kolmogrov-Smirnov test will be conducted as the first stage. Then, Paired Samples T-test will be used for normal distribution data calculation, while Wilcoxon Signed Rank test will be for the opposite as a nonparametric statistics tool. The findings of this research are there is no significant difference in ROA snd ROE, but there is significant difference in NPM. This research can be useful in finding out whether ESOP affects profitability of Indonesian public company. Since the effect of ESOP gives mixed result towards company profitability, companies should reevaluate the company’s main issue and objective regarding the profitability. Implementing ESOP affects companies’ NPM which means that the companies get bigger profit from the revenue in the span of three years after implementing the ESOP.