Stock Options Or Stock Shares

Stock Options

A company Stock Options could be referred to as a form of compensation. A company can grant employees, contractors, consultants and investors Options for time spent in their service. These Options are like contracts which give employees the right to buy company Stock Shares at a pre-set price, also known as the Grant Price. So a new employee needs to know if the company, the employer, offers Options or Shares, or both. If you’re a new employee, you need to do some research and find out which would benefit you the most.

Stock Shares

Stock Shares is when a company grants shares to a new employee, after working for a certain time. An employee is granted a number of shares after they’ve worked for the company for a period of time. Only after completing the required time, will the employee be eligible for the allocated shares. Whatever the value of allocated shares at the start of employment, that value remains the same. when the shares are granted to the employee, regardless of whether the market value has increased or decreased.

Choose Shares

If you choose to buy Shares, which will be issued in your name as soon as their purchased, these will be on the share register. You will then be able to sell or transfer these Shares, subject to terms and conditions set out by the company. The value of these Shares can increase, decrease or remain unchanged, depending on their market value. In the end, it is a risk you take, especially when you choose to transfer or sell at market value.

Choose Options

If you choose Options at the start of your employment with the company, you will have to wait until you are able to buy shares at the agreed Grant Price. The Grant Price is a set price, regardless of their market value. You’ve got nothing to loose, but it might be disheartening to find out that shares have decreased in value but you’re stuck with a set price. If however, shares have increased in value, the Grant Price will be like a bargain. Something to think about.

Research For An Informd Decision

You need to research in order to make an informed decision before you make your choice. Find out for instance, how many shares you’re entitled to, once you are able to buy shares. How is the market trending? If your company uses vesting as an incentive, you could earn assets when you retire. Corporate lawyers can also be a great way to help you make an informed decision and review your contract and explain the jargon. Please get in touch for an informal discussion. SG

Make An Enquiry

Call us now on 020 7113 4003 or complete our Online Enquiry and we will be delighted to talk with you about your legal matter.

Free Enquiry

Back to all news

Share Article With:

Make An Enquiry

    Global Excellance Awards

    Client Reviews

    DG Law were fantastic throughout our purchase process. We had a short, fixed, timeline to

    Venetia Lawson-Cruttenden [solicitor] is fantastic!  She is always so thorough and efficient and gives you the

    DG Law supported us through a very difficult contractual negotiation to achieve exactly the outcome

    We were very pleased with the way that DG Law helped us on our transaction

    Thanks for all the help from DG Law in pulling together our somewhat complicated loan. 

    DG Law resolved a difficult lease renewal for us and their services were excellent –

    I needed understanding and experienced legal advice. DG Law provided an excellent service at a

    My experience was second to none – the service was professional and personal. DG Law

    DG Law always step up to the plate on our transactions and handle the various

    DG Law was recommended to me and my partner and I received excellent advice –

    Having worked with DG Law a number/couple of times now, I have been really impressed

    DG Law were constantly at hand, and kept pro-active throughout the thorny process of getting

    DG Law organised and ran a very useful session to help to make our team’s

    DG Law came recommended to me and whilst setting up a new business it was

    We were recommended three lawyers to handle the sale of our seven year old successful

    Why Choose Us?

    We live by our core values of transparency, flexibility and being honourable – every day

    We put ourselves in your shoes so we understand your problems from the inside out

    We deliver our advice in a way that is easy to understand