A study on the effectiveness of the share option scheme in Singapore

• Main Authors: Kee, Chye Hock, Ong, Lay Khim, Loh, Teck Hui
• Other Authors: Nanyang Business School
• Format: Final Year Project
• Language: English
• Published: 2014
• Subjects: DRNTU::Business::Accounting
• Online Access: http://hdl.handle.net/10356/58600
• Institution: Nanyang Technological University

This research project aims to evaluate the effectiveness of the Share Option Scheme (SOS) in the Singapore context. Three aspects of the scheme are examined. Firstly. our study shows that the potential costs, whether in absolute terms or relative to the profit before tax, could be significant for companies. Secondly, the SOS is found to be perceived by companies as effective in reducing staff turnover, to be motivational to employees and to improve organisational commitment. Thirdly, contrary to popular belief. when key financial ratios are studied, the performance of companies with the SOS are found to be less satisfactory as compared to the industry.