Stock options are the most well-known form of long-term compensation motivations for executives in leading companies. Because of this, stock options are currently being provided to a lot of employees in many companies. Here are some things you need to know about stock options.
1) Stock options are appropriate for: small companies where growth is anticipated, and publicly-owned companies that want to provide company ownership to its employees.
2) Stock options are still popular. This is according to the National Center for Employee Ownership who reported that there are 9 million employees who participate in approximately 4,000 plans. This is in comparison to the 1 million participants a decade ago.
3) More and more companies are offering stock options to rank and file employees in addition to the executive suite. In the current environment where top talents matter a lot, offering stock options have become an effective way of luring efficient employees.
4) When implementing stock options, consider the following:
How much stock a company will be willing to sell
Who will receive the options
The number of options available to be sold...