
	Where results make sense

Topic: Employee stock option

Related Topics

Stock option

Executive compensation

Corporate raid

International Accounting Standards

GAAP

United States

In the News (Wed 9 Dec 09)

Northern Trust

Marvin Harrison

Peter Chernin

Gary Locke

Match Play

Penelope Cruz

Mickey Rourke

AR Rahman

Danny Boyle

Hugh Jackman

	Employee Stock Options Fact Sheet
		Traditionally, stock option plans have been used as a way for companies to reward top management and "key" employees and link their interests with those of the company and other shareholders.
		Employees who have been granted stock options hope that the share price will go up and that they will be able to "cash in" by exercising (purchasing) the stock at the lower grant price and then selling the stock at the current market price.
		Stock option plans can be a flexible way for companies to share ownership with employees, reward them for performance, and attract and retain a motivated staff.
	www.nceo.org /library/optionfact.html (766 words)

	EMPLOYEE STOCK OPTIONS
		Employee or executive stock options (ESOs for short) are call options granted by a company to an employee on the stock of the company.
		They are a sweetener for the employee: they encourage him or her to remain an employee, and they encourage him or her to work towards an increase in the financial health of the company, which will translate into an increased share price, and eventual increased wealth of the employee.
		Hence employee stock options are the so-called `golden handcuffs': they incentivise the employee to remain in the employ of the company and as a group for the employees to work towards the best interests of the company (this assumes that the free-rider and other gametheoretic issues are not important).
	www.riskworx.com /eso/eso.html (2575 words)

	Employee stock option - Wikipedia, the free encyclopedia
		Employee Stock options are mostly offered to management as part of their executive compensation package.
		Thus employee stock options are similar to warrants.
		Stock options are sometimes jokingly referred to as "golden handcuffs" (in the same vein as golden handshakes or golden hellos).
	en.wikipedia.org /wiki/Employee_stock_option (2146 words)

	Employee Stock Options valuation - Excel add-in by Peter Hoadley
		Employee stock options (sometimes called executive stock options) also tend to have a much longer duration than standard options (many years vs a few months for most exchange traded options) during which time interest rates, dividend yields, and the underlying stock volatility may change significantly from their values at ESO grant date.
		Unlike exchange traded options which tend to be relatively short term in nature, employee stock options are usually long term (eg ten years) and valuations are highly sensitive to variations in volatility estimates.
		The ESO functions are included in the commercial version (ie purchased under a commercial/corporate license) of the Hoadley Derivatives Add-in for Excel.
	www.hoadley.net /options/develtoolseso.htm (1745 words)

	A, B, C's of Canada's New Employee Stock Option Regime
		The $100,000 annual limit on the fair market value of options available for the deferral applies to the year of vesting — the year the employee gains the right to exercise the options under the terms of the option agreement — and not to the year in which the option is actually exercised.
		The employment benefit stock option deduction would also be increased to 50 percent, for post-October 17 benefits, to ensure that the effective inclusion rate for stock options, which qualify for the deduction, is also 50 percent.
		To be eligible for the deduction, employees must work for an eligible research corporation and they must spend at least 30 percent of their time directly undertaking, supervising, or supporting research and development in the corporation's tax year in which the stock option agreement is entered into.
	www.us.kpmg.com /microsite/tax/ies/tea/winter/stories/article03.htm (1963 words)

	Employee Stock Option Plan: ESOT Resources (Site not responding. Last check: )
		An employee stock option plan is a contract between the owner and employee that will allow employees to buy a certain number of company shares at a fixed price, within a given time.
		An employee stock option plan should not be confused with and "ESOP," which is a retirement plan.
		Employee stock option plans are incentives to employees that are built with the intention of keeping your company operating optimally.
	www.esotresources.com /employee_stock_option_plan.html (159 words)

	Employee stock option accounting changes Journal of Accountancy - Find Articles (Site not responding. Last check: )
		Performance-based stock options are those where the option price or the number of shares an employee is entitled to receive is based on the outcome of a specified future event (such as an increase in the company's earnings per share [EPS]).
		Such options are less attractive to employers because they are more likely to result in recognition of an employee compensation expense since the option's exercise price may be less than the stock's market price at the measurement date (an in the money option).
		Option value and the resulting employee compensation expense are especially sensitive to inputs such as stock price volatility assumptions.
	www.findarticles.com /p/articles/mi_m6280/is_n1_179/ai_15995145 (888 words)

	OptionTradingpedia.com - Your Free Online Option Trading Encyclopedia
		Because a stock option is defined in terms of its relationship to an underlying stock, stock options are referred to as "Derivatives".
		As stock options are meant to be a hedging tool in the first place, it is also a great way to protect your stocks from dropping in value by buying the same number of put options as the number of shares that you own.
		In option trading, the only good measure of stock option liquidity is therefore how quickly the market makers are willing to trade with you in the absence of another corresponding option trader.
	www.optiontradingpedia.com (4615 words)

	Employee Stock Option Plans - Edward Jones
		An employee stock option plan enables employees to purchase their company's stock at a stated price and, if they wish to do so, resell it at some point in the future, at the then current market price.
		Employee stock option exercise plans are designed to help employees exercise the stock options offered by their employer.
		Employee stock option exercise plans are designed to reduce time, to simplify the process of purchasing the company's stock, and to provide loans to take advantage of stock option plans.
	www.edwardjones.com /cgi/getHTML.cgi?page=/USA/products/investments/stocks_esop.html (307 words)

	Employee Stock Option FAQs - Nonqualified & Incentive Stock : A.G. Edwards
		Your incentive stock options are subject to special tax treatment when you exercise them and could subject you to the alternative minimum tax.
		For example, if the option price for your options was set at $50 on the day they were granted to you, once the options are vested and until they expire, you would be able to purchase company stock at $50 per share, regardless of the stock's current market price.
		A stock option analysis is a personalized report that shows you the number of options you hold, their cost bases, the tax implications of exercising those options and other important information you need to make intelligent decisions regarding your stock options.
	www.agedwards.com /public/content/sc/financial_services/investment_products/stocks/stock_options/stock_option_faqs.html (1893 words)

	Guidance on Employee Stock Option Valuation \| Hempstead & Co
		The options are expensed by determining their “fair value” at the time of issuance, and then recognizing this amount over the period during which the options are vested by the employee.
		If the employment of an employee holding vested options is terminated, he is usually obliged to exercise the options immediately (within 30 to 90 days), regardless of their remaining term.
		In addressing the overall approach to option valuation, the SEC staff states its recognition that there is a range of reasonable conduct that an issuer might use in valuing employee stock options.
	www.hempsteadco.com /vol23no2.shtml (2274 words)

	Employee Stock Options
		If you are going through a divorce and want to find the value of employee options owned by your spouse or yourself visit this website devoted specifically to that need.
		Your stock options are one of the most important sources of potential wealth you may ever own.
		Use our employee stock option analysis services to find out the fair value of your options right now and make projections to see what they should be worth in the future.
	www.mindxpansion.com /employee-options (1380 words)

	Tax Rules on Employee Stock Option Plans
		Stock option plans are quite often an integral part of an employee’s compensation package to create long term capital use in retirement.
		The employee can claim a tax deduction equal to one-half of the ‘option benefit’ if the shares are common shares and the exercise price, at the time the options were granted, was equal to the fair market value of the shares.
		You have options to acquire 3000 common shares of ABC Company at $30 per share (equal to the fair market value of the shares on the date the options were granted).
	www.professionalreferrals.ca /article-722.html (908 words)

	Employee Stock Option Plans
		Employee Stock Purchase Plan (ESPP) - This is generally used in listed companies, wherein the employees are given the right to acquire shares of the company immediately, not at a future date as in ESOS, at a price lower than the prevailing market price.
		The employee is given the appreciation in the value of shares between two specified dates as an incentive or performance bonus, that is linked to the performance of the company as a whole, as reflected in its share value.
		Till recently, the difference between the cost of the share to the employees and market value on the date on which an employee got the share would be taxed as perquisite in addition to capital gains tax payable by the employee on sale of those shares.
	www.karvy.com /articles/esops.htm (889 words)

	Employee Stock Option Plan ESOP articles and information
		China: Millions of employees are becoming owners in their companies, and both the central and local governments are seriously exploring the idea of large scale enterprise reform through employee ownership.
		Employees also are putting more of their own investments in company stock.
		First, where employee ownership has been around long enough to study, especially in the United States, data clearly and continually shows a strong positive relationship with corporate performance when these plans are tied to a participative management philosophy.
	www.arizonaesopgroup.com /index.php?page=article6 (1227 words)

	Employee Stock Options Plans
		Employees who are granted stock options hope to profit by exercising their options at a higher price than when they were granted.
		Employee Stock Options Plans should not be confused with the term "ESOPs," or Employee Stock Ownership Plans, which are retirement plans.
		If the price of the stock increases to $20 per share, for example, the employee may exercise his or her option to buy 1,000 shares at $5 and then sell the stock at the current market price of $20.
	www.sec.gov /answers/empopt.htm (342 words)

	Google’s New Employee Stock Option Program
		A stock option gives the holder the right to purchase a stock at the “strike” price, which is set at the time of the option purchase.
		Stock options give incentive for employees to increase the value of the firm (stock price up) since the spread and their profit from the option is getting larger.
		Stock options align both the employee and stockholders interest, but this is now eliminated due to this program.
	www.techcrunch.com /2006/12/13/googles-new-employee-stock-option-program (1323 words)

	FindLaw - 1997 Employee Stock Option Plan - Apple Computer Inc.
		An Employee who has been granted an Option or SAR may, if he or she is otherwise eligible, be granted an additional Option or Options, SAR or SARs.
		Upon termination of an Optionee's Continuous Status as Employee (other than termination by reason of the Optionee's death), the Optionee may, but only within ninety days after the date of such termination, exercise his or her Option or SAR to the extent that it was exercisable at the date of such termination.
		An Option or an SAR may be exercised, during the lifetime of the Optionee or SAR holder, only by the Optionee or SAR holder or by a transferee permitted by this Section 11.
	contracts.corporate.findlaw.com /agreements/apple/esop.2000.06.27.html (2321 words)

	TRD - 6202 - Ontario Research Employee Stock Option Credit Information Bulletin (Site not responding. Last check: )
		Eligible research employees of eligible R&D-intensive companies can receive a refund of their Ontario personal income tax on up to $100,000 of taxable income each year from taxable stock option benefits and taxable capital gains arising from the sale of shares acquired through exercising eligible stock options.
		For corporations that have amalgamated, if the taxation year in which the stock option agreement is entered into is the first taxation year after amalgamation, the requirement to undertake R&D in Ontario, and the expenditure test apply to the taxation years of each of the predecessor corporations that ended immediately before the amalgamation.
		A stock option agreement is an agreement whereby a corporation agrees to sell or issue shares of the corporation, or of a corporation with which it does not deal at arm's length, to an employee of the corporation a corporation with which it does not deal at arm's length.
	www.trd.fin.gov.on.ca /userfiles/HTML/cma_3_4241_1.html (2928 words)

	SSRN-Discussion of: Real Investment Implications of Employee Stock Option Exercises by Wayne Guay
		The intuition for why employee stock options are unlikely to dilute EPS is based on theory and empirical evidence that granting options to employees is conceptually similar to raising capital through issuing stock.
		As such, stock options are not expected to be any more dilutive than other forms of equity finance, such as common stock and most stock-based securities (e.g., convertible debt, warrants, convertible preferred stock) that contribute to the shares used to compute the denominator of EPS.
		In fact, because employee stock options are not expensed in earnings, one can argue that they dilute EPS to a lesser extent than other forms capital.
	papers.ssrn.com /sol3/papers.cfm?abstract_id=299981 (477 words)

	Salary \| Advice \| Compensation Planning \| A Sample Employee Stock Option Plan
		The only options which may be granted under the Plan shall be options which do not constitute incentive stock options, within the meaning of section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code").
		In the event Stock is not publicly traded at the time a determination of its value is required to be made hereunder, the determination of its fair market value shall be made by the OOC in such manner as it deems appropriate.
		Option agreements are put into writing, including in particular the discretionary aspects of individual agreements, such as vesting, terms of the option, etc. The company can decide to accelerate vesting if it wants to.
	www.salary.com /advice/layouthtmls/advl_display_nocat_Ser56_Par126.html (3004 words)

	Option (finance) - Wikipedia, the free encyclopedia
		Employee stock options (employee stock option) are issued by a company to its employees as compensation.
		The key argument is that traders could risklessly hedge a long options position with a short position in the stock and continuously adjust the hedge ratio (the delta value -- one of the option sensitivities known as "greeks") as needed.
		Assuming that the stock price follows a random walk, and using the methods of stochastic calculus, a price for the option can be calculated where there is no arbitrage profit.
	en.wikipedia.org /wiki/Stock_option (2805 words)

	Smith Hayes \| Employee Stock Option Plans (ESOP)
		Description: An employee stock option enables employees to purchase their company’s stock at a stated price and if they wish to do so, resell it at some point in the future, at the current market price.
		Employee stock option exercise plans are designed to help employees exercise the stock options offered by their employer.
		Objective: Employee stock option exercise plans are designed to reduce time, to simplify the process of purchasing the company’s stock, and to provide loans to take advantage of stock option plans.
	www.smithhayes.com /look/products/stocks/esop.htm (182 words)

	\|Houlihan Valuation Advisors\|>\|Services\|>\|Employee Stock Option Plans\|
		HVA provides valuation advisory services to plan fiduciaries in all types of employee stock ownership plan ("ESOP") transaction, including the initial formation and purchase of shares by the ESOP, annual valuation updates for administrative purposes, and subsequent stock transactions involving the ESOP.
		In complex multi-investor transactions, HVA analyzes the proposed transaction structure, sources and uses of funds, allocation of equity and estimated internal rates of return of the various transaction participants and advises the plan fiduciaries regarding the fairness of the proposed transaction to the ESOP.
		Often, HVA will design different classes of stock in order to obtain a transaction that is fair to the ESOP while also accomplishing the investment objectives of the other parties in interest to the transaction.
	houlihan.com /services_esops.htm (121 words)

	Employee Stock Option - ESO
		An employee stock option is slightly different from a regular exchange-traded option because they are not generally traded on an exchange, and there is no put component (where a profit is made frome the underlying stock following).
		If the stock goes down, the holder of an option would lose the opportunity for a bonus, but wouldn't feel the same pain as the owner of the stock.
		Another problem with employee stock options is the debate over how to value them and the extent to which they are an expense on the income statement.
	baystreet.investopedia.com /terms/e/eso.asp (376 words)

Try your search on: Qwika (all wikis)