|
||
Should You Pay Stock Options?It used to be that stock options were reserved only for executives or members of top management. However, more and more employers are opting to offer stock options to all employees as part of their compensation package. In fact, more than 10 million American workers receive stock options as part of their compensation or as bonuses. What Are Stock Options?
Stock options always have an expiration date, which means employees have a limited window of time to cash in their options. They have a certain starting and end date, and if the options aren't exercised within the allotted time frame, the employee loses them. Should You Pay Stock Options? Stock options are a particularly good idea for companies that are just starting out and would like to retain as much cash as possible. They allow starter businesses to hang onto cash while at the same time providing employees with a portion of the growth of the company. So small, growth-oriented businesses would be wise to offer their employees stock options. Stock options aren't just for starter companies as well. For firms that have already gone public, stock options can help to include employees in ownership. Clearly, stock options don't come without risks. For companies that don't perform well, stock options are useless and may even cause employees to lose money, which is certainly not good for morale or for employees. In addition, a number of laws are in place regarding stock options. Companies who offer stock options are required to expense stock options a the time they are granted, rather than when the employee exercises the option. There are a number of benefits as well as drawbacks to offering stock options. For companies who are just starting out, stock options can be a win-win situation, as they allow companies to retain much-needed cash while still offering their employees the opportunity to share ownership in the business. Before deciding whether or not to offer stock options, it's important to take all factors into consideration. |
||
Copyright 2003-2020 by BusinessKnowledgeSource.com - All Rights Reserved
Privacy Policy, Terms of Use |