Employee Ownership and Moral Hazard: How Broad-Based Equity Sharing Can Lower Agency Costs and Reduce Inequality

<p>Providing incentives to top managers by offering equity has become the norm; this practice, however, does not hold for all levels of employees. After tax incentives for employee ownership were introduced through the Employee Retirement Income Security Act of 1974, there has been little legislative support to encourage companies to implement broad-based equity sharing programs. Moreover, decades of neoliberal policies have incentivized the pursuit of short-term profits and speculation, which contribute to economic instability and explain the growing gap between productivity and real wages observed since the late 1970s. Developments in the literature contend that employee ownership aligns the goals of ownership and workers and will embolden employees to work more productively and make decisions in the best interest of the firm. Equity incentives can thus generate a mutually beneficial relationship and will result in higher compensation for all levels of employees. By analyzing theoretical and empirical research on equity incentives, this thesis claims that employee ownership increases productivity, compensation, and job stability, and can help contain economic instability and address high levels inequality.</p>

Name thesis:degree_name

M.A.

Level thesis:degree_level

Masters Thesis

Year dc:date.available

2021

Author dc:creator

• Hudson, Colin Clinton

Contributors dc:contributor

• Chiara Piovani
• Frédérique Chevillot
• Markus Schneider
• Yeohyub Yoon

• Employee ownership
• ESOPs
• ESPPs
• Inequality
• Moral hazard
• Neoliberalism
• Business Administration, Management, and Operations
• Economics
• Inequality and Stratification
• Labor Economics

Statement dc:rights

• <p>Copyright is held by the author. User is responsible for all copyright compliance.</p>

Language dc:language

en

Repository record dc:identifier

https://digitalcommons.du.edu/etd/1875

OAI identifier oai:identifier

oai:digitalcommons.du.edu:etd-2868