Abstract
Employee stock option plan (ESOP) represents one of the compensation forms conducted by a company to overcome the agency cost problems. The objective of this study is to analyse the ESOP implementation determinants. They include total assets (TA), debt to equity ratio (DER), market to book value ratio (MBR), growth, current ratio (CR), and time interest earned ratio (TIER) on the implementation of ESOP for companies in Indonesia. The population of the research was all of the companies which implement the ESOP and which are listed on Indonesia Stock Exchange (IDX). Its samples were 34 companies. The result of this study shows that the company size, leverage, growth, and liquidity has a significantly negative effect on the ESOP implementation. The enterprises which valued from the MBR and TIER have a significant positive effect on the ESOP implementation.
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