The Value of Stock Options To Non-Executive Employees

This study empirically investigates the value employees place on stock options using information from the option exercise behavior of individuals. Employees hold options for another period if the value from holding them and reserving the right to exercise them later is higher than the value of exercising them immediately and collecting a profit equal to the stock price minus the exercise price. This simple model implies the hazard describing employee exercise behavior reveals information about the value to employees of holding options another time period. We show the parameters of this model are identified with data on multiple option grants per employee and we apply this model to the disposition of options received in the 1990s by a sample of over 2000 middle-level managers from a large, established firm outside of manufacturing. Exercise behavior is modeled using a random effects probit model of monthly exercise behavior that is estimated using simulated maximum likelihood estimation methods. Our estimates show there is substantial heterogeneity (observed and unobserved) among employees in the value they place on their options. Our estimates show most employees value their options at a value greater than the option’s Black-Scholes value

New Data for Answering Old Questions Regarding Employee Stock Options

This paper is a description and summary of existing questions and sources of data on stock options with an emphasis on two issues; what are the issues surrounding stock options in the national accounts and what value do employees place on stock options? We survey many existing data sources and outline some of the ways these data can be used to answer questions about the use and impact of employee stock options. The data sources include administrative records from individual firms, survey data of employee perceptions, disclosure filings with the SEC and other government, nonprofit, and international sources. We explore ways to investigate the value of options to employees and their cost to the firms using data on employee exercise decisions. Finally, we discuss the implications of our findings for public policy, the reporting of stock options, and how options are considered in the national accounts

Employees’ Choice of Method of Pay

Who chooses what type of pay? The costs and benefits of “flexible” and “cafeteria-style” benefit plans have been discussed for some time. Additionally, many papers have considered the potential costs and benefits of certain types of pay plans (e.g. salaries versus piece rates). In this paper, we use detailed data from a specific firm that annually set the total compensation level for each of its employees but then did something extremely unusual. At the start of each pay year, the firm set an exchange rate for the dollar trade-off between cash pay and stock option pay. It then gave every employee nearly complete choice over the fraction of their pay that was contingent (stock options, bonus) versus guaranteed (salary). There are several empirical findings. There is substantial variation in the choice of contingent pay with some workers choosing almost all base pay and others choosing almost entirely stock options. Younger employees, more experienced employees, higher paid employees, and male employees are more likely to allocate a larger fraction of their total compensation to at-risk alternatives. The robustness of these results varies somewhat depending on the empirical specification and set of covariates used

Growth of solid hcp \^4He off the melting curve

We report studies of the growth of solid hcp \4he at pressures higher than the bulk freezing pressure using a cell design that allows us to inject atoms into the solid. Near the melting curve during injection we observe random events during which the pressure recorded in the cell drops abruptly. These events are accompanied by transient increases in the temperature of the cell. We discuss these transients and conclude that they represent the solidification of meta-stable liquid regions and the associated relief of strain in the local solid. We also observe that further from the melting curve the transients are no longer recorded, but that we can continue to add atoms to the solid, increasing its density at fixed volume. We document these changes in density with respect to changes in the chemical potential as a function of temperature and discuss these in the context of recent theoretical work.Comment: 7 pages, 8 figure

Literary Labyrinths: Reading Like a Detective

Studying literature is like walking through a labyrinth of interpretative possibilities. So, it is no mystery why an English major would be fascinated with detectives; they seem to show the way out of the literary labyrinth. Like detectives, literary critics look for clues in the texts they study and interpret them to find meaning. However, many critics argue that detectives make bad models, and that reading like a detective leads to interpretations that are at best boring and at worst dangerous. It is not clear whether detectives are the best literary critics or the worst. To make sense of this problem, I argue that it is necessary to pay attention to specific fictional detectives rather than talking about the figure of the detective in general. This thesis is a study in sleuths that examines how individual detectives fail and succeed as models for literary critics. I will begin in the nineteenth century with Wilkie Collins’s novel The Moonstone (1863) and Arthur Conan Doyle’s Sherlock Holmes stories and then move onto the twentieth century with the hard-boiled detective novels The Big Sleep (1939) by Raymond Chandler and The Maltese Falcon (1929) by Dashiell Hammett and Agatha Christie’s Miss Marple short stories. Later in the twentieth century, detective fiction turns metaphysical, as in Jorge Luis Borges’s “Death and the Compass” (1942). None of these detectives offer satisfactory ways out of the labyrinth. However, I argue that Charles Dickens’s novel Bleak House (1853) anticipates the problems of interpretation that arise throughout the history of detective fiction and shows through Mr. Bucket, the detective, how to live in a literary labyrinth

Near field interaction of microwave signals with a bounded plasma plume

The objective was to study the effect of the arcjet thruster plume on the performance of an onboard satellite reflector antenna. A project summary is presented along with sections on plasma and electromagnetic modeling. The plasma modeling section includes the following topics: wave propagation; plasma analysis; plume electron density model; and the proposed experimental program. The section on electromagnetic modeling includes new developments in ray modeling and the validation of three dimensional ray results

Mass flow through solid 4He induced by the fountain effect

Using an apparatus that allows superfluid liquid 4He to be in contact with hcp solid \4he at pressures greater than the bulk melting pressure of the solid, we have performed experiments that show evidence for 4He mass flux through the solid and the likely presence of superfluid inside the solid. We present results that show that a thermomechanical equilibrium in quantitative agreement with the fountain effect exists between two liquid reservoirs connected to each other through two superfluid-filled Vycor rods in series with a chamber filled with solid 4He. We use the thermomechanical effect to induce flow through the solid and measure the flow rate. On cooling, mass flux appears near T = 600 mK and rises smoothly as the temperature is lowered. Near T = 75 mK a sharp drop in the flux is present. The flux increases as the temperature is reduced below 75 mK. We comment on possible causes of this flux minimum.Comment: 20 pages, 22 figures, 7 table

Thrust Stand Measurements of the Conical Theta Pinch FARAD Thruster

It is found that the impulse of a pulsed inductive plasma thruster utilizing preionization is maximized for a particular ratio of the stored energy in the capacitor to the injected propellant mass. The fact that the impulse depends on the ratio of the initial stored energy to injected propellant mass agrees with previous current sheet studies, supporting the idea that a Townsend-like breakdown process strongly influences current sheet formation, and in turn, current sheet formation strongly affects the operational efficiency of the device. The optimum in half cone angle of the inductive coil can be explained in terms of a balance between the direct axial acceleration and the radial pinching contribution to thrust. From the trends in these data we conclude that operation at the correct ratio of capacitor energy to propellant mass is essential for efficient operation of pulsed inductive plasma thrusters employing a preionized propellant

Design of a Microwave Assisted Discharge Inductive Plasma Accelerator

The design and construction of a thruster that employs electrodeless plasma preionization and pulsed inductive acceleration is described. Preionization is achieved through an electron cyclotron resonance discharge that produces a weakly-ionized plasma at the face of a conical theta pinch-shaped inductive coil. The presence of the preionized plasma allows for current sheet formation at lower discharge voltages than those employed in other pulsed inductive accelerators that do not employ preionization. The location of the electron cyclotron resonance discharge is controlled through the design of the applied magnetic field in the thruster. Finite element analysis shows that there is an arrangement of permanent magnets that yields a small volume of resonant magnetic field at the coil face. Preionization in the resonant zone leads to current sheet formation at the coil face, which minimizes the initial inductance of the pulse circuit and maximizes the potential electrical efficiency of the accelerator. A magnet assembly was constructed around an inductive coil to provide structural support to the selected arrangement of neodymium magnets. Measured values of the resulting magnetic field compare favorably with the finite element model

Thrust Stand Measurements Using Alternative Propellants in the Microwave Assisted Discharge Inductive Plasma Accelerator

Storable propellants (for example water, ammonia, and hydrazine) are attractive for deep space propulsion due to their naturally high density at ambient interplanetary conditions, which obviates the need for a cryogenic/venting system. Water in particular is attractive due to its ease of handling and availability both terrestrially and extra-terrestrially. While many storable propellants are reactive and corrosive, a propulsion scheme where the propellant is insulated from vulnerable (e.g. metallic) sections of the assembly would be well-suited to process these otherwise incompatible propellants. Pulsed inductive plasma thrusters meet this criterion because they can be operated without direct propellant-electrode interaction. During operation of these devices, electrical energy is capacitively stored and then discharged through an inductive coil creating a time-varying current in the coil that interacts with a plasma covering the face of the coil to induce a plasma current. Propellant is accelerated and expelled at a high exhaust velocity (O(10-100 km/s)) by the Lorentz body force arising from the interaction of the magnetic field and the induced plasma current. While this class of thruster mitigates the life-limiting issues associated with electrode erosion, many pulsed inductive plasma thrusters require high pulse energies to inductively ionize propellant. The Microwave Assisted Discharge Inductive Plasma Accelerator (MAD-IPA) is a pulsed inductive plasma thruster that addressees this issue by partially ionizing propellant inside a conical inductive coil before the main current pulse via an electron cyclotron resonance (ECR) discharge. The ECR plasma is produced using microwaves and a static magnetic field from a set of permanent magnets arranged to create a thin resonance region along the inner surface of the coil, restricting plasma formation, and in turn current sheet formation, to a region where the magnetic coupling between the plasma and the theta-pinch coil is high. The use of a conical theta-pinch coil also serves to provide neutral propellant containment and plasma plume focusing that is improved relative to the more common planar geometry of the Pulsed Inductive Thruster (PIT). In this paper, we describe thrust stand measurements performed to evaluate the specific impulse and thrust efficiency of the MAD-IPA for a variety of propellants. Propellants tested include both widely-used, non-reactive noble gases like argon, and rarely-used propellants such as water, hydrazine and ammonia. Dependencies of impulse data on propellant species are discussed in the context of the current sheet formation and electromagnetic plasma acceleration processes