Loyalty and Agency Problems: Study Comparing France Tunisia – Managers shareholders

The shareholder brings to the company equity. By cons, it expects a value corresponding to its investment risk. It is therefore essential to control the activity of managers to limit the actions adverse to his interest. But if the manager owns the business interests coincide and agency problems are reduced. Therefore, the shareholder manager encourages them to act in the interests of shareholders and meet their expectations.
This alignment of interests between the management authority and the providers of corporate funds emphasize the loyalty of shareholders and encourage them to retain their titles. Therefore, the manager devotes its efforts to maximize value.
These are the boards that choose the type of remuneration. They make more use of the stock option plans (POA). In this regard, there is abundant literature on the value of the formulas of the POA. The work of Jensen and Meckling are considered to be the first to show a positive relationship between the value of the business and all property rights owned by the leader. Confirming the results of the study of Leland and Pyle, under which property managers indicates the quality of investment projects carried out by the company.
Haugen and Senbet proposed a policy for granting stock options in order to reduce non-cash benefits managers and contribute to an investment strategy that better meets the interests of shareholders. Similarly, Desbrieres analyzes the role of POA in increasing the value of the company by reducing monitoring costs borne by shareholders but by encouraging leaders to retain only profitable projects and large sizes.
Despite the many advantages of the POA, they have limitations on improving the long-term performance of the company and the dilution of the wealth and power of shareholders.
The POA are formulas by which share the shareholders or other owners of the business leaders and give employees the opportunity to purchase shares of the company they manage. The purchase price or subscription is fixed at date of issue of options and remains fixed throughout the period of the offer.
These options are applied by listed and unlisted companies with limited liquidity and whose growth opportunities are very high. In Tunisia, the legal framework on the rules of stock options was established by Law No. 99-101 in December 1999. At first he limited the application of this scheme to some companies in the services sector, engineering, new technologies of communication. Then, this scheme has been generalized to include other sectors.
The POA has three general characteristics:
1    – The duration of exercise: this time is determined by the assembled shareholders and determines the deadline after which the option is exercised or waived.
2    – during the year: the purchase price of the underlying asset (as financial stocks or shares) that is set by the special meeting.
3    – The bonus: it concerns the price of a currency option buyer pays the seller of the option at the conclusion of the contract.
In sum, the POA can, firstly, to regulate conflicts of interest between managers and shareholders and to limit conflicts especially on the volume and the risk of investment projects (Desbrieres, 1999). On the other hand, they contribute to the creation of shareholder value.
H2: There is a positive relationship between managers and shareholders, the shareholder loyalty.
H’2: The attention of shareholders is oriented managers the evolution of the share price, which implies a mitigation of conflicts of interest.