Sellers or Keepers? Share Retentions in Share Option Plans

Please do not quote without permission 1 ABSTRACT This paper reports the main findings of a study of shareholding behaviour amongst participants in Sharesave share option plans in the UK. It examines the influences upon the decision to sell or retain shares once options have been exercised, utilising data from a study of employee share plan participants in five large UK companies. The main findings are that investment portfolios, age, and the reasons for participating in SAYE are important influences on the decision to retain shares. Contrary to expectations, job position and income levels have little influence. Nor do prevailing levels of organisational commitment. We show that this has implications for studies of the effects of equity-based rewards, corporate practice, and national policy.