Table 6
Stock Ownership by Occupational Category, 19891995
Occupational
No. of Persons (millions)
Category
1989
1995
Increase (%)
Executive/professional
17
21
28%
Clerical/technical/sales
14
17
27%
Service/craftspeople
6
8
25%
Laborers/farmers
3
7
107%
Homemakers or
not in labor force/retirees
7
8
16%
Source: "Shareownership 1998," New York Stock Exchange, and calculations by the author
Through mutual
funds, workers
Through mutual funds, workers not only
stock option plans by ShareData, Inc., and
assembled portfolios but diversified them by
the American Electronics Association found
not only assem-
strategy and by risk. The most popular funds
that 53 percent of respondents offered all
bled portfolios
included long-term growth, growth and
employees stock options. Among the largest
but diversified
income, aggressive growth, and company
companies, those with 5,000 employees or
stock. Among risk-averse investors, index
more, 45 percent offered universal stock
them by strategy
funds and guaranteed investment contracts
options in 1997 compared with 10 percent in
and by risk.
(GICs) were popular.
1994. Over the same period, the percentage
A 1997 survey of 401(k) plans reported the
of middle-sized companies--those with
most common investment options available
500999 employees--offering stock options
to all employees rose from 30 to 51.3 9
to workers in broad categories: 82.3 percent of
plans offered actively managed domestic equi-
Active Prepurchase Behavior
ty funds, 74.5 percent offered balanced
stock/bond funds, and 67.4 percent offered
As workers expanded their market activi-
actively managed international equity funds.36
ties, they obtained more information from
more sources. In an extensive survey of mutu-
The frequency with which workers can
al-fund customers' prepurchase behavior, ICI
make investment choices has also increased
found that "shareholders typically reviewed
throughout the 1990s. The PSCA reports
13 separate items of information about the
that the percentage of plan providers who
fund or its sponsoring company." The survey
allow participants to reallocate assets on a
estimated how many potential buyers consid-
daily basis rose from 7.8 percent in 1990 to
ered various factors:40 risk level, 90 percent;
61.3 percent in 1997. (See Table 10.)
Employers have also increased the fre-
total return, 88 percent; reputation of the
quency of their own contributions37 and the
company, 88 percent; investment goals of the
speed with which employees are vested.3 8
fund, 82 percent; types of company in which
the fund invests, 81 percent; annual fees, 76
Choice has also expanded with regard to
percent; fund performance vis-à-vis the per-
stock options. While regulations require
formance of similar funds, 75 percent; sales
401(k) plans to be open to most workers,
charge, 73 percent; length of time the compa-
stock options have traditionally rewarded
ny has done business, 71 percent; fund com-
management and key employees. That
pany's selection of funds, 69 percent; fund
changed in the 1990s. A 1997 survey of 1,100
13