Most companies, including multi-national companies are now offering
their staff employee stock options. This is significantly different to
what used to prevail in a couple of decades back when an employee stock
option were the sole prerogative of the company top executives and a few
high performing staff members. Why have companies, at least within the
last 10 years, began rewarding their staff with employee stock options?
If you have been searching for an answer to this question, then this is
the right article to read.

For a start, employee stock options had traditionally been ‘reserved′
for the top brass of most companies. However, in the last few years,
there has been a growing trend among most companies, progressive ones I
must say, to open the door to all and sundry in the company to own
employee stock options. One trustworthy source that backs this growing
trend is the National Center for Employee Ownership. According to the
NCEO, in the last decade alone, the number of employees who own employee
stock options have increased almost 10 fold. It is quite obvious that
most companies over the last few years have seen the benefits of
allowing most employees to own stock options in the firms financial
success.

What an employee stock option does, if you have been offered one, is
that it gives you (the employee) the right to buy, within a specified
time frame, a number of the company’s stocks and other traded
securities. However, you are not under any obligation to exercise this
right whatsoever, if you so desired. That’s why they are called options.
An employee stock option can and usually benefit both employer and
employee in many ways.

Introducing and offering employee stock options to staff also
encourages staff to be more committed to the company’s overall progress.
If, for instance, you owned employee stock options in a company, it is
obvious that you would want the company to do well financially. This is
so that your employee stock options returns will be large enough for
you. Therefore you would be more committed and loyal to the company than
you would if you had no stake in the company’s financial health and
well-being. Staff also feel a sense of belonging and control if they own
employee stock options in the firm. This can only be good for both
parties.

Are employee stock options all rosy without any problems? Certainly not. They are a great