What Are These Options?

Written by James Sanders

What exactly does a stock option provide to an employee when received?  Does an owner lose control by issuing stock options to employees?  These are questions that I typically get when a business owner is considering this type of equity compensation. 

A stock option is a type of employee benefit where a company grants the right to purchase a set number of shares of the company’s stock at a predetermined price in the future.  This type of equity compensation essentially gives employees a chance to share in the company’s success by potentially profiting if the stock price increases. 

So, an option is not quite ownership, but its also not quite a bonus either.   

We at MPL want to wish you and our family a Merry Christmas, Happy Hannukah, Happy New Year and Happy Holidays in general.  We will be picking the employee compensation series in the new year.