Employee Stock Options
/ˌɛm.plɔɪ.i stɒk ˈɒp.ʃənz/
Definitions
- (n.) A contractual right granted by an employer allowing an employee to purchase company stock at a predetermined price within a specified period.
The employee exercised her stock options after the company went public.
- (n.) A form of compensation used by employers to incentivize employees, aligning their interests with shareholders by offering potential equity.
Employee stock options can motivate staff to improve company performance.
Forms
- employee stock options
- employee stock option
Related terms
See also
Commentary
These options often include vesting schedules and specific expiration dates; clear drafting of terms is essential to avoid disputes on exercise timing and valuation.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.