Does employee stock ownership plan matter? An empirical note

Fitri Ismiyanti, Putu Anom Mahadwartha

Research output: Contribution to journalArticlepeer-review

7 Citations (Scopus)


Employee Stock Ownership Plan (ESOP) is a company program to provide incentives to managers to increase shareholder wealth and to align interests between the shareholders and the management. This ESOP is one of the most effective efforts to reduce conflicts of interest between the owners and the managers. ESOP program is basically intended to provide motivation and incentives for employees, so that employees will have a sense of concern (sense of belonging) to the company. Productivity is a reflection of the level of efficiency and effectiveness of work in total in a company. Productivity becomes very important, because it can describe the performance of a company. Performance is defined as the size or level at which individuals and organizations can achieve goals effectively and efficiently. This study aims to examine the effect of ESOP variables on company performance by using productivity as a mediating variable in non-financial companies in Indonesia Stock Exchange. The sample used in this research is companies that implement ESOP in the period 2000-2015. In this study, the company's performance is measured by using return on assets, return on equity and Tobin's Q, while productivity is measured by using sales per employee, cash flow per employee, and total assets turnover. Based on the results, it can be concluded that Employee Stock Ownership Program (ESOP) has a positive and significant impact on productivity.

Original languageEnglish
Pages (from-to)381-388
Number of pages8
JournalInvestment Management and Financial Innovations
Issue number2
Publication statusPublished - 2017


  • ESOP
  • Financial performance
  • Productivity


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