Do Broad-Based Stock Options Create Value?

Abstract

Once the exclusive province of company executives, today organizations across the corporate landscape are offering stock options to employees at all levels. Identifying strategically important behaviors and linking them to the stock option plan design can create value for an organization. Options can be used to attract and retain employees, align worker and company interests, and enhance corporate performance, particularly when worker participation and ownership are actively encouraged. However, a vital component of this equation is greater knowledge acquisition: options should be accompanied by training dollars to allow employee-owners to learn about the organization's industry and competitive forces and how to read and interpret financial documents. Under these circumstances, a corporate culture steeped with ownership participation and continuous learning will flourish and ultimately enhance the organization's bottom line.