Rajah Lehal

The Purpose of a Stock Option Plan

January 31, 2016

Links from this article: Read the article here. here!

“>Stock options are often issued as a part of a company’s incentive program to the company’s and its subsidiaries’ key persons who are working on the company’s projects. The purpose of the stock options is to give personnel a financial incentive to work hard to increase the company’s shareholder value. This is a common strategy with businesses as the employees can see their connection with their work and the company they are staying with. In this article, SSH Communications launched a new stock option plan with the intention to encourage and motivate their employees to stay and work long-term. However, many things affect their stock value that they cannot control as well.Read the article here.

Take away:

  • Stock options can encourage employee performance but their value is often out of the employee control. Any negative fluctuations could result in a loss of motivation and the opposite is also true, where positive fluctuations will encourage performance.

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Written by Rajah. Rajah Lehal is Founder and CEO of Clausehound.com. Rajah is a legal technologist and technology lawyer who is, together with the Clausehound team, capturing and sharing lawyer expertise, building deal negotiation libraries, teaching negotiation in classrooms, and automating negotiation with software.