INFLUENCE OF ROA, CURRENT RATIO, DAR, MARKET TO BOOK

RATIO (MBR) AND SIZE OF THE ADOPTION STOCK OPTION

PROGRAM (Case Study to firms conducting ESOP (Employee Stock
Option Plan) on the Stock Exchange period 2000-2009)
Hamidah
Faculty of Economics Universitas Negeri Jakarta
Email : hamidahsam@yahoo.com
Umi Mardiyati
Faculty of Economics Universitas Negeri Jakarta
Email : umi.mardiyati@gmail.com
Eva Fatihatus Saadah
Faculty of Economics Universitas Negeri Jakarta
Email : eva.fatihatus@gmail.com
ABSTRACT
Broadly
the
purpose of
this
study is
to investigate
the
effect
of
ROA, Current Ratio, DAR, Market to Book Ratio (MBR) and Size both simultaneously
and partially to total rupiah of stock options granted to employees the company
extensively in the adoption of ESOP. Objects that are used in this study were nonfinancial companies listed on the Stock Exchange that implement ESOP, observed pool
with period in 2000 until 2009. The analytical tool used in this study is Multiple Linear
Regression Analysis using OLS
method. F-test and t-test
was
used to
test
the hypothesis. The research method is a causal research. The results showed that
the variation of the total rupiah of stock options (ESOP) can be explained by 52,91 %
by 5 variation of independent variable such as ROA, Current Ratio, DAR, Market to
Book Ratio (MBR) and Size. This study shows that ROA, Current Ratio, DAR, Market to
Book Ratio and Size effect simultaneously the total rupiah of stock options but only
partially ROA, MBR and Size Variable effect the total rupiah of stock options.
Research also shows that Size has the most significant influence to the total rupiah of
stock options. This suggest that size is a factor that greatly affects the total rupiah of
stock options.
Keywords: Employee Stock Option Plan, ROA (Return On Asset), Current Ratio,
DAR (Debt to Asset Ratio), Market to Book Ratio (MBR), Size, Agency
Problem

INTRODUCTION
The company's goal is to maximize shareholder wealth as reflected in the increase
in stock price. This goal is not always run smoothly, because it has been known that the
managers have personal goals that are not aligned with company goals. This will
cause the agency problems between managers and shareholders.
To avoid and minimize agency problems are usually carried outsurveillance
of managers through an audit of financial statement and provide a compensation
package for managers. Compensation of managers can be a salary and bonus, Employee
Stock Option Plan (ESOP) and long-term incentive plan (Ansar, 2004).
Employee Stock Option Plans (ESOP) is one of the company's long term policy
involving the psychology of labor in the form of compensation programs based equity
(stock) (Astika, 2006).
Costa in Ansar (2004) argued that ESOP would encourage employees and
managers always try to increase share price in the future because of that employees
and managers would get benefit from compensation based stock.
This program has been widely used because it has been growing awareness of
the importance
program

of alignment between manager

organized

and

coordinated

and shareholders. In

by BAPEPAM and

Indonesia, this

known by

Employee

Stock Ownership Program (PKSK) and arranged in PSAK No.53 (IAI, 2002).
Development of companies that adopting ESOP in Indonesia can be seen in table
1. From table 1 can be seen that the number of companies that adopting
ESOP until year 2009 are 58 companies and only 13.7% from 422 total companies
listing on the Indonesia Stock Exchange. Here can be seen the number of
companies listing on the Stock Exchange which adopted ESOP is still small whereas
a lot of benefits can be gained from adopting ESOP.
This

study intended

to analyze

the fundamental

factors

measured

by financial ratios and firm size that significantly affected the adoption of ESOP with
view of how much total rupiah of stock options granted to employees and executives.
The research was based on previous studies such as research of Astika (2006), Uchida
(2006), Qian and Sun (2001).

Table 1: Development of Public Company Adopting ESOP on the Stock Exchange

Number

Year

Number of Firms

1
2
3
4
5
6

1999
2000
2001
2002
2003
2004

1
3
8
10
9
6

Cumulative
Number
1
4
12
22
31
37

7
8
9
10

2005
2006
2007
2008

3
2
10
4

40
42
52
56

11

2009

58

Source : Based on the author from various source

In this study investigated the effect of ROA, Current Ratio, Debt to Asset Ratio
(DAR) , Market to Book Ratio (MBR) and Size both simultaneously and partially to
total rupiah of stock options granted to employees the company extensively in the
adoption of ESOP.
This

study provides some

benefits, for

science,

this

study

provides

knowledge what factors affect the adoption of ESOP. ESOP is measured from the
total rupiah stock options that will be granted company to executives and employees
and also

as well as one of basic considerations for companies in an effort

to improve program employee stock option program (ESOP).

THEORY STUDY
Agency theory is a potential conflict of interest created when managers are given
power by the owner of the company to make decision where manager may have
personal goals. (Brigham and Houston, 2006: 26).
Agency conflict between managers and shareholders or owners can be minimized
by a monitoring

mechanism that can align interests between managers and

shareholders. The monitoring mechanism can cause agency costs. According

to Jensen and Meckling (1976) agency

costs includes three

costs,

they

are

monitoring cost, bonding cost and residual loss.

In the context of financial management, agency relationship can occur between
shareholders and

managers

Houston, 2006: 26).

also

shareholder

and

creditors

(Brigham

and

Based

on studies

conducted by BAPEPAM (2002:10), the

purpose of

implemented ESOP :
1. Giving award (reward) for all

employees, directors, and certain

contribution to increasing the company's performance.

2. Creating alignment of employee interests
and the
officers with shareholder interests and missions, so

parties for

mission and
there

is

his

executive

no conflict

of

interest between shareholders and those who run the company's business activities.
3. Improve employee motivation and commitment to the company because they are also
the owners of the company, which is expected to increase productivity and company
performance.
The hypothesis in this study are:
H1: ROA has negative effect to total rupiah of stock options
H2: Current Ratio has negative effect to total rupiah of stock options
H3: DAR has negative effect to total rupiah of stock options
H4: MBR has positive effect to total rupiah of stock options
H5: SIZE has negative effect to total rupiah of stock options
H6: ROA,Current Ratio, DAR, Market to Book Ratio (MBR) and SIZE simultaneously
effect total rupiah of stock options.
METHODOLOGY
This study is causal research with quantitative approach which in this study will
identify a causal relationship between the variables studied. variable is defined as the
cause is called the dependent variable and the variables defined as the result is called the
independent variable.
Research Variables and Measurement
Independent Variables
Independent variables used in the study is financial ratios which proxy by ROA,
Current

Ratio,

DAR,

Market

to book

ratio

(MBR)

and company size.

1. ROA (Return On Asset) is a profitability ratio that used to measure the effectiveness
of the company in generating profits by utilizing the company's overall assets. ROA =
net income / total assets.

2. Current Ratio is liquidity ratios used to measure a company's ability to meet its short
term obligations with short-term resources (or current) available to meet corporate
obligations. Current Ratio = Current assets / current liabilities
3. DAR (Debt to Asset Ratio) is one measure of long-term solvency ratios (leverage
ratio) are commonly used to view the company's long-term ability to meet its
obligations. DAR = total debt / total assets
4. MBR (Market to Book Ratio) is one measure of the ratio market value. Companies
usually use MBR to analyze the Growth Opportunities. MBR = market value per
share / book value per share.
5. SIZE is the amount of assets owned by the company. A proxy for firm size is natural
logarithm value of total assets. SIZE = ln Total assets
Dependent Variables
Dependent variable in this study is ESOP whose value is measured by the total
rupiah of stock options (grants) through the conversion of each option with shares of
stock multiplied by the value agreed in the contract at maturity. Values are standardized
by the function ln (natural logarithm) (Iswandi, 2009) so that Grants is the natural
logarithm of total rupiah of stock options. Grants (total rupiah of stock options) = price
of shares ESOP maturity X number of shares ESOP
Population and Sample Determination Method
In determining the populations and samples, researcher used a purposive sampling
method. Criteria used in the selection of the sample firms are as follows:
1. Non-financial companies listed on the Indonesia Stock Exchange
2. The company reported full annual report in the period
3. The Company uses the fiscal year ending in December
4. The Company did not delisted during the study period
5. Companies that adopt ESOP and the data available in annual reports.
Data Collection Procedures
Using reports from BAPEPAM, data recording public offering of shares on the
Stock Exchange and the data used in other studies to determine the list of companies

that adopt ESOP, using the company's financial statement of samples to obtain
information about the implementation of ESOP and ESOP data information required for
testing, using ICMD as source data information of company's financial performance in
the form of financial ratios.
Analysis Methods
In this study using multiple linear regression analysis with the OLS method. With
the regression equation model as follows:
lnGrantit = +1 ROAit + 2 CURATit + 3 DARit + 4 MBRit + 5
lnSIZEit + it
where:
Grant

the

natural

logarithm

of

total

rupiah

of

stock

options.

Shares of stock options X value agreed in the value at maturity

contract.
ROA

= ratio of net income to total assets

Current Ratio = ratio of current assets to current liabilities

DAR

= ratio between total debt to total assets

MBR

Size

= natural logarithm of total assets

= intercept

market

value

per

share

divided

by

book

value

per

share

1, 2, 3, 4, 5 = regression coefficients

= residual (error variable)

Regression Model Testing Stage

1. Data processing with Microsoft Excel to include all the dependent variables and
independent variables of the financial statements.
2. Conduct a test of quality through test data with outliers and normality test.
3. Data processing to obtain descriptive statistics with the program Eviews 7.0
4. Conduct a test to detect the presence of the classical assumption of
multicollinearity,autocorrelation and heteroskedasticity
5. Perform regression data pool by using the OLS method between the independent
variables to the dependent variable.
6. Perform statistical test t, F, and R2 and interpret data.
RESULTS AND DISCUSSION

Analysis Unit Description

In this study the authors used a sample of all non-financial companies listed on
the Stock Exchange the period 2000-2009 and selected 35 companies that collected 70
samples of of observations.
Before knowing the influence between variables in the regression equation, first
know the characteristics of the data by looking at mean values of variables used to
measure the average value of a distribution of data (group data) and standard deviation
to measure the average value calculated from the difference or deviation any data
averaging. Table 2 summarizes descriptive statistics of all variables needed for testing
using regression models.

JML_RP_OPSI_SAHAM_JUTA

ROA

CURRENT_RATIO

DAR

MBR

Mean
Median
Maximum
Minimum
Std. Dev.
Skewness
Kurtosis

40029.79
4496.625
567291.6
47.15670
97096.08
4.116587
21.00149

0.066273
0.044500
0.401500
-0.296400
0.122035
0.680609
5.198531

7.050429
1.675000
334.2400
0.270000
39.76071
8.132001
67.41926

0.524857
0.515000
1.540000
0.040000
0.229092
1.004737
7.467598

3.930286
1.780000
24.71000
-0.020000
5.448995
2.237530
7.159026

44691
19002
27872
20481
63588
2.276
7.883

Jarque-Bera
Probability

1142.864
0.000000

19.50216
0.000058

12875.21
0.000000

69.99247
0.000000

108.8607
0.000000

129.9
0.000

Sum
Sum Sq. Dev.

2802085.
6.51E+11

4.639100
1.027590

493.5300
109083.1

36.74000
3.621349

275.1200
2048.716

3.13E
2.79E

Observations

70

70

70

70

70

Table 2 : Descriptive Statistics

Source : Data Processed by Eviews 7.0

Table 2 shows that mean value total rupiah of stock options (GRANT) is
40029.79 million, ROA is 0.066273, Current Ratio is 7.050429, DAR is 0.524857,
MBR is 3.930286 and Size is 4469160 million. From the table can be seen the value
of standard deviation greater than the mean (average) indicating that there is a large
deviation of data with average.

Study Result and Discussion

SIZE_J

70

Quality Test Data

1. Outlier test.
After conducting tests and exclude an outlier then this study has been
free from outliers. Before the outlier excluded value of R2 is 0, 455 and after
removing the outliers obtained R2 is 0.564 and shown on table 3.
Table 3 : OutlierTest Result
Model Summaryb
Adjusted
R
R
Model
R
Square
Square
Std. Error of the Estimate
Casewise Diagnosticsa
1
.675a
.455
.413
14.611.935
Case
Std.
ln Jml
Predicted
Residual
a. Predictors: (Constant), ln Size, current ratio, mbr, dar, roa
Number
Residual
Rp Opsi
Value
Saham
b. Dependent Variable: ln Jml Rp Opsi Saham
62
-4.148
176.690
23.729.916
-60.609.293

Model Summaryb
Model
1

R
.751a

R
Square
.564

Adjusted R
Square
.529

Std. Error of the Estimate

12.482.074

a. Predictors: (Constant), ln Size, current ratio, mbr, dar, roa

b. Dependent Variable: ln Jml Rp Opsi Saham
Source : Data Processed by SPSS 19.0

2. Normality test
The results of statistical test for normality using the Jarque Bera (JB) test. From the
Result obtained that the probability value of JB is 0.893282 (89.32%) greater than
alpha 5%, then the data is normally distributed (Winarno, 2009)

Figure 1 : Normality Test Result

Series: Residuals
Sample 1 69
Observations 69

8
7
6
5
4
3
2
1

Mean
Median
Maximum
Minimum
Std. Dev.
Skewness
Kurtosis

1.24e-14
0.001795
3.069694
-2.535613
1.201441
0.028516
2.725676

Jarque-Bera
Probability

0.225706
0.893282

0
-2

-1

Source : Data Processed by Eviews 7.0

Multiple Regression Testing

1. Multicollinearity test
In this test, the authors use the correlation matrix among variables to detect
multicollinearity. Multicollinearity in a model can be seen if the correlation between
two variables have a value above 0.8 (rule of thumb), Nachrowi (2006:247). From
the results of testing using Eviews at table 4 can be seen that among the independent
variables do not have a value above 0.8. Therefore, the authors conclude there is
no multicollinearity in this study.
Table 4: Multicollinearity test Result

ROA

CURRENT_RATIO

DAR

MBR

LN_SIZE

ROA

1.000000

-0.059292

-0.085379

0.311818

0.341225

CURRENT_RATIO

-0.059292

1.000000

-0.107783

-0.083774

-0.070898

DAR

-0.085379

-0.107783

1.000000

-0.108490

0.388855

MBR

0.311818

-0.083774

-0.108490

1.000000

-0.238811

LN_SIZE

0.341225

-0.070898

0.388855

-0.238811

1.000000

Source : Data Processed by Eviews 7.0

2. Heteroskedasticity Test
In
this
study
Eviews program.

the authors using White Heteroskedasticity Test

In this White test,

the

value that

the OBS * R-squared (chi squares) and probability.The

must

be

results of

through

considered

is

Probability (P-

value) 0.2292 > 0.05 means that there is no heteroskedastisicity in this study.
Heteroskedastisicity test results, shown in table 5.
Table 5 : Heteroskedasticity Test Result
Heteroskedasticity Test: White
F-statistic
Obs*R-squared
Scaled explained SS

1.396910
6.886290
4.953331

Prob. F(5,63)
Prob. Chi-Square(5)
Prob. Chi-Square(5)

0.2376
0.2292
0.4216

Test Equation:
Dependent Variable: RESID^2
Method: Least Squares
Date: 05/22/11 Time: 23:17
Sample: 1 69
Included observations: 69
Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
ROA^2
CURRENT_RATIO^2
DAR^2
MBR^2
LN_SIZE^2

-1.340671
-9.323020
-1.49E-05
-1.460920
0.000739
0.004311

1.948274
7.190029
1.68E-05
0.762328
0.002469
0.002499

-0.688133
-1.296660
-0.884934
-1.916394
0.299343
1.725085

0.4939
0.1995
0.3796
0.0599
0.7657
0.0894

R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
F-statistic
Prob(F-statistic)

0.099801
0.028357
1.855530
216.9085
-137.4220
1.396910
0.237625

Mean dependent var

S.D. dependent var
Akaike info criterion
Schwarz criterion
Hannan-Quinn criter.
Durbin-Watson stat

1.422541
1.882412
4.157159
4.351429
4.234233
1.896058

Source : Data Processed by Eviews 7.0

3. Autocorrelation Test
The

author

uses

autocorrelation with lag 2.

Breusch-Godfrey test to see whether

there

is

According Widarjono (2009: 149) lag

selected

by

trial error test by looking at the value of AIC and SIC are the smallest in order to
get the best reply model and the results can be seen in Table 6. The results of using
Breusch-Godfrey test indicates that the value p-value (0.1130) > 0.05, which
means there

are

no

autocorrelation.

Test

results can

also

be

seen from

the calculated value of 2 arithmetic is 4.359948 <2 table. (df = 2, = 5%) is

5.99147, which means there is no autocorrelation at lag 2.
Table 6 : Breusch-Godfrey Test Result
Breusch-Godfrey Serial Correlation LM Test:
F-statistic

2.057214

Prob. F(2,61)

0.1366

Obs*R-squared

4.359948

Prob. Chi-Square(2)

0.1130

Test Equation:
Dependent Variable: RESID
Method: Least Squares
Date: 05/23/11 Time: 14:58
Sample: 1 69
Included observations: 69
Presample missing value lagged residuals set to zero.
Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
ROA
CURRENT_RATIO
DAR
MBR
LN_SIZE
RESID(-1)
RESID(-2)

0.375607
0.345024
-0.000326
0.068534
0.006606
-0.016397
0.212147
-0.191475

2.926428
1.494427
0.003848
0.747430
0.031480
0.109248
0.131927
0.131283

0.128350
0.230874
-0.084698
0.091692
0.209861
-0.150094
1.608061
-1.458493

0.8983
0.8182
0.9328
0.9272
0.8345
0.8812
0.1130
0.1498

R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
F-statistic
Prob(F-statistic)

0.063188
-0.044315
1.227774
91.95315
-107.8142
0.587775
0.763287

Mean dependent var

S.D. dependent var
Akaike info criterion
Schwarz criterion
Hannan-Quinn criter.
Durbin-Watson stat

1.24E-14
1.201441
3.356934
3.615961
3.459698
1.934873

Source : Data Processed by Eviews 7.0

Multiple Linear Regression Analysis

Testing is done with do regression all independent variables such as ROA,
Current Ratio, DAR, MBR and the SIZE to the dependent variable total rupiah of stock
options (ESOP). After going through the classic assumption test, this study has been
free to multicollinearity, autocorrelation and heteroskedasticity so we get the best
model for multiple regression equations shown in Table 7.

Table 6: Mulitiple Linier Regression Analysis Result

Dependent Variable: LN_JML_RP_OPSI_SAHAM
Method: Least Squares
Date: 05/22/11 Time: 23:03
Sample: 1 69
Included observations: 69
Variable

Coefficient

Std. Error

2.728069

2.948002

t-Statistic
0.925396

Prob.
0.3583

ROA
CURRENT_RATIO
DAR
MBR
LN_SIZE
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
F-statistic
Prob(F-statistic)

-2.851531
0.002091
0.197154
-0.054895
0.725689
0.563724
0.529099
1.248207
98.15536
-110.0661
16.28082
0.000000

1.508463
0.003826
0.750757
0.031777
0.110259

-1.890354
0.546572
0.262607
-1.727525
6.581651

Mean dependent var

S.D. dependent var
Akaike info criterion
Schwarz criterion
Hannan-Quinn criter.
Durbin-Watson stat

0.0633**
0.5866
0.7937
0.0890**
0.0000*
22.79791
1.818955
3.364235
3.558505
3.441309
1.651278

Note : ** Statistically significant at level 10%

*Statistically significant at level 1%
Source : Data Processed by Eviews 7.0

Hypothesis Test Results

Based on the result of a regression test in table 6, the hypothesis test using t-stat
and F-stat test and the coefficient of determination. F-stat test can be seen seen from
the value probability of Fstat value is 0.0000 < 0.05, H0 is rejected, which means ROA,
Current Ratio, DAR, Market to Book Ratio (MBR) and SIZE simultaneously affect total
rupiah of stock options.
Based on the results in table 6 can be seen the value of each independent variable t
statistics to total rupiah of stock options.
1. The effect of ROA to total rupiah of stock options (ESOP)
ROA variable has a coefficient of -2.851531 and the probability of the t-stat test
showed a significant 6.33%. This shows that ROA has a negative and significant
impact on total rupiah of stock options (ESOP). The company that have low ROA
will tend to adopt ESOP. Low ROA means that the resulting low profit, to seek
additional funding sources, companies are usually issued ESOP as additional capital
by giving stock options to employees and corporate executives. These results are
supported by Astika (2006) and Iswandi (2009) and consistent with the hypothesis.
2. The effect of Current Ratio to total rupiah of stock options (ESOP)
Current Ratio variables have a coefficient of 0.002091 and probability of t-stat test is
58.66%, this indicates that Current Ratio variable is not significant. Positive
coefficient means the higher the level the liquidity of the company the higher
implementing the ESOP. Current Ratio indicates that the higher the number of funds
that are embedded in current assets. To finance the operations needed funds, one of
which could be met by applying ESOP. Based on study of BAPEPAM (2002:10) one
of the goals held ESOP is to give an award (reward) for all employees, directors, and

certain parties for his contribution to increasing the company's performance. This is
in line with the results of the study authors that with increasing current ratio as a
proxy for one measure of financial performance (liquidity ratio) then the company
will provide rewards in the form of ESOP to all employees, managers, directors and
commissioners. These results are supported by the Anshar (2004) that the variable
liquidity in 2000 and 2001 have a positive coefficient on ESOP and Astika (2006) but
contrary to the hypothesis, Current Ratio is negative and significant effect on total
rupiah of stock options (ESOP).
3. The effect of DAR to total rupiah of stock options (ESOP)
DAR variable has a coefficient 0.197154 and probability of t-stat test is 79.37%, this
suggests that the t-stat test DAR variable is not significant. Positive coefficient
means the higher the level the leverage the company the higher to implement the
ESOP, because the circumstances facing the company in financing and capital
needs. Companies with high debt levels indicated that the company can not take
loans again and in accordance with the Debt Covenant (contract long-term debt) is an
agreement that aims to protect creditors of the manager's actions against the interests
of creditors. The company implemented the ESOP as an alternative source of
corporate funding. This is consistent with Core and Guay (2001) that when firms
face financing and capital requirements tend to apply the ESOP. These results fit
previous studies such as Astika (2006), Ding and Sun (2001) and Ansar (2004).
4. The effect of MBR to total rupiah of stock options (ESOP)
MBR variable has a coefficient -0.054895 and t-stat test showed a significant at
8.9%. This shows the MBR negatively affect the to total rupiah of stock options
(ESOP). MBR low causing low growth of the company so the stock market price is
low, then companies tend issue stock options to executives and employees. Expected
by granting stock options to managers and employees as an incentive for them to
improve their performance to increase the market price of company stock in the
future. If the stock price increases at the time of carrying out stock options gained a
high market price, so this option would provide financial incentives for executives
and employees. These results are contrary to the hypothesis and previous
studies. Previous research stated by Uchida and Ding and Sun that the MBR be
positively related to ESOP. These differences may be due to differences in
measurement used in this study, measurement of the MBR which is used is stock
price of the stock market to the price of the book, other differences are differences of
objects and study period used and the different characteristics of investors.
5. The effect of SIZE to total rupiah of stock options (ESOP)

SIZE variable has a coefficient of 0.725689 and t-stat test showed a significant at
1%. This suggests that SIZE proxy by total assets has positive effect on the total
rupiah of stock options (ESOP). The higher the SIZE of a company, the higher the
adopt ESOP. In Indonesia, companies that adopt ESOP are large companies like
Indosat, Astra International, Astra Agro Lestari because have proffesionals to design
the ESOP program. These results are in accordance with agency theory, that a low
level of managerial ownership (shareholding <100%) can cause agency problems. In
larger companies will lower the level of managerial ownership, therefore, would be
more difficult to monitor the performance of managers. Large firms have greater
incentives to adopt the ESOP to reduce agency problems. Uchida (2006) and Benz et
al (2001) states that the the larger comapany the company the greater granted stock
options. Managers in large firms tend to have to allocate assets more complex. In
large firms the lower the level of managerial ownership, making it more difficult to
monitor the performance of managers. Therefore at large firms are more likely to
adopt the ESOP to reduce agency problems. The results of research studies according
Astika (2006), Uchida (2006) and Benz et al (2001), but contrary to the hypothesis
that the smaller companies adopt ESOP.
Coefficient of Determination
This study has value of Adjusted R Squared is 0.529099 . This meansthat 52.91%
of the variation of the number of dollars of stock options (grants) can be explained by
the variation of the five independent variables such as ROA, Current Ratio, DAR,
Market toBook Ratio and Size. While the rest of 47.09% is explained by other variables
not included studied.
CONCLUSIONS AND SUGGESTIONS
Conclusion
Based

on data

concluded that simultaneously,

analysis and from

there

is significant

previous
influence

discussion can be
between

Current Ratio, DAR (Debtto Asset Ratio),MBR (Market to Book Ratio) and Size
total rupiah
rupiah of

of

ROA,
to

stock options. In addition there are other variables that affect total

stock options outside of the research variables. Based on test results

of multiple

regression

analysis using

OLS method, the fundamental

factors that

affect total rupiah of stock options (ESOP) can be concluded as follows:

1. ROA has a negative and significant influence on total rupiah of
(ESOP). This

conclusion supports previous

studies such

stock options

as Astika (2006)

and

Iswandi (2009)
2. Current Ratio has a positive coefficient and no significant to total rupiah of stock
options (ESOP). This conclusion supports previous studies such as Astika (2006) and
Anshar (2004)
3. DAR has a positive coefficient and no significant

total

rupiah

options (ESOP). This conclusion supports previous studies such as

(2001) and Ansar (2004), Astika(2006) and Adli (2009).
4. MBR has
a negative and
significant influence on
Stock options (ESOP). This

study

Ding and Sun

of

studies such

total

shows that Size has

stock

rupiah

conclusion supports previous

as Uchida (2006) and Ding and sun (2001).

5. SIZE has a positive and
significant influence on
Stock options (ESOP). This

total

of

rupiah

the most

of

Significant

influence on total rupiah of stock options. This suggests that the Size is a factor
that greatly affects total rupiah

stock options. This conclusion supports previous

studies such as Astika (2006), Uchida (2006) and Benz et al (2001).

Suggestion
From the results of study can be suggested several things, first stock option
associate compensation to executives and employees with the future success so that
the conditions for the development of capital markets will largely determine the success
of this program. Therefore, managers are expected to try to make the company
grow in coming

years so

that stock

prices

will

rise and

when

implementing stock options gained a high market price, so this option would provide
financial incentives for executives and employees. Second, this study assess decision
total

rupiah of

stock options only from the fundamental consist of ROA,

Current Ratio, DAR, MBR and Size. For further research is expected to assess in terms
of other fundamental variables or non-financial variables such as qualitative variables
like personal characteristics of managers (such as gender).
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