EMPLOYEE STOCK OPTIONS.
The article presents information on employee stock options. It is common practice for many corporations, when negotiating an employment contract with an administrative officer, to grant the employee an option to purchase a designated number of shares in the corporation which employs him. Occasionally the option is exercisable immediately for the full number of shares agreed upon, but more often the contract provides that only a limited number of shares can be acquired each year or that the option can not be exercised until a given period of time has elapsed. Some option agreements have no limit upon their life but others lapse unless exercised by a specified date. The tendency is to make the option nontransferable, although even at this point no uniform pattern is discernible. Some options are assignable, while others are not. The option most favorable to the officer employee establishes an option price for the stock at a figure somewhat below the then existing market price. In this instance the option may have an immediate realizable value. This is particularly true if it is assignable or can be exercised immediately.
- DOI
- 10.2308/tar-7037522
- Volume
- 20 (3)
- Pages
- 320-326
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref