How Do You Offer Stock Options To Employees?
Offering stock options to your employees can be a powerful incentive. In a way, you’re making them partners, who are personally invested in the success of the business. Know that a stock option plan is not the same as an employee stock ownership plan, or ESOP. Know that companies generally grant two types of options, those that meet Internal Revenue Service standards for preferential tax treatment and those that don’t. Options accorded tax breaks are called incentive stock options, or ISOs; the others are called nonqualified stock options, or NSOs. Both types of can be granted to any employee. Consult a certified public accountant before you decide how many options to grant, who will get them, and which type of options you will grant. Get an appraisal of the company, establishing its fair market value. This will enable you to determine the value of stock to which options ultimately are tied so that you can determine the exercise price of the options. Develop the stock-option plan sever
