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Ten Minute Guide to Employee Stock Option Purchase Plans by Ken Little

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Chapter 2. Why Options Are Important

In this lesson, you will learn how employee stock options can be an important part of your compensation package and help build a solid retirement program.

Options as Compensation

Employee stock options are a part of the compensation package of many key executives and have been for many years. A careful reading of annual reports often reveals that a majority of a top executive's compensation is in the form of stock options or some form of equity compensation.

Unfortunately for shareholders these plans often reward top management even when the company did not do well.

Top management of a company is directly responsible to the shareholders through the board of directors. Stock options that become available in the ...

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