%0 Thesis %A SUALIHU, MOHAMMED AMINU %D 2019 %T The Role of Equity Compensation in Reducing Inefficient Investment in Labour %U https://bridges.monash.edu/articles/thesis/The_Role_of_Equity_Compensation_in_Reducing_Inefficient_Investment_in_Labour/7413557 %R 10.26180/5c05af803e7bf %2 https://ndownloader.figshare.com/files/14574929 %K Over-investment, under-investment, labour, stock options, restricted stock, agency, empire-building, risk-aversion. %K Financial Accounting %X This thesis examines whether equity compensation incentivises executives to make efficient labour investment decisions. Specifically, it examines whether the components of equity compensation — stock options and restricted stock — affect over- and under-investment in labour. Based on a sample of 12118 firm-year observations from 1992 to 2014, it is found that stock options exacerbate over-investment and mitigate under-investment in labour. In contrast, restricted stock is found to mitigate both over- and under-investment in labour. Overall, the findings demonstrate that stock options and restricted stock matter in executives’ labour investment decisions. %I Monash University