Looking to Benchmark Pay?
See our salary, cost-of-living, and executive compensation data in action.
Employee Ownership
By receiving stock options, do employees actually own part of the company?
Let's take a look at the arguments.
| Yes | No |
|---|---|
| Employees are not receiving stock options for nothing. They are actually buying shares with their own money. | Most stock option plans allow for "cashless exercises" where employees sell shares shortly after the grant has vested avoiding a "cash outlay" and thereby foregoing stock ownership. |
Business Impact
Regardless of the arguments, stock options have the potential to positively impact business outcomes.
These are the benefits of company ownership to the employee:
- Wealth accumulation from long-term company success
- Greater engagement and understanding of business performance and results
The overall impact of the plan is dependent upon several factors on the employer's part:
- Plan goals
- Creating a culture of employee ownership
- Plan training and education
Memory Jogger
The impact of a stock option plan depends on all of the following factors EXCEPT the company's:
Looking to Benchmark Pay?
See our salary, cost-of-living, and executive compensation data in action.