An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

Kathleen M. Weiden
Fairfield University

Abstract: In this paper, I examine the relation between the stock option proportion of pay of non-executive employees and the use of a defined benefit plan. I find a negative relation, which I interpret as consistent with the hypothesis that firms reduce their use of stock options when there are other mechanisms available to retain employees. My results also show that new economy firms use defined benefit plans to a lesser extent than do old economy firms, but that the negative relation between the stock option proportion of pay and the use of a defined benefit plan reported in cross-sectional tests hols for new economy firms as well.

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