Sellers or keepers? Stock retentions in stock option plans

This article examines stock-holding behaviors among participants in Save As You Earn (SAYE) stock option plans in the United Kingdom. It examines the influences upon the decision to sell or retain stock once options have been exercised, utilizing data from a study of option plan participants in five large U.K. companies. The main findings are that investment portfolios, the reasons for participating in the option plan, and age are important influences on the decision to retain stock. Contrary to expectations, income and risk preferences have little direct influence once other factors are considered. These results have implications for research, corporate practice, and national policy.