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| + | == How Do Employee Stock Options Work- 0 == | ||
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| + | <html>Companies offer stock options to top-paid executives as well as rank-and-file staff. Stock options from an employer give employees the ability to buy a specific number of shares of the company’s stock. The employer sets the time period the stock can be purchased and the price the employees will pay. | ||
| + | Both publicly held and private companies make stock options available for several reasons: | ||
| + | -To attract and keep qualified employees. | ||
| + | -To make employees feel more invested in the company. | ||
| + | -To recruit skilled workers by offering compensation that exceeds a traditional salary. | ||
| + | Stock options are common for all types of companies but are especially popular with start-up companies who are attempting to keep as much cash in reserve as possible. Stock options are typically offered as an employee perk and are not intended to serve as a replacement for salaried compensation. | ||
| + | How Employee Stock Options Work: | ||
| + | Stock options give employees the opportunity to purchase a specified number of shares in the company for a particular period of time. The price the stock is offered is referred to as the grant price. The grant price is typically the same price the stock is being offered on the market at that time. One of the primary benefits of exercising the ability to purchase stock is if the stock price has increased,[http://www.jerseys-hearts.com/Wilds-11-Parise-Green-Jerseys-16582/ Wilds 11 Parise Green Jerseys], the employee has the ability to purchase shares at the original grant price and has the option of either selling the stock for profit or holding the shares with the hope the stock price will continue to increase. | ||
| + | Difference between Stock Options and Stock Ownership Plans: | ||
| + | Employee ownership has increased in popularity over the last 10 years and will likely continue. There are two types of agreements that allow employees to obtain partial ownership in their employer’s company. The arrangements are stock options plans and stock ownership plans. An employee stock ownership plan is a define-contribution retirement plan which allows employees to become partial owners. Contributions are made by the employer and grow tax-deferred. Stock options are not contributed by the employer but are purchased by the employee and can be sold and traded.</html> | ||
