employee stock option

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Stock Option

A non-tradeable call option giving an employee at a publicly-traded company the right to buy shares in that company for a certain price. Stock options in this sense are often a part of compensation for major and mid-level executives in large publicly-traded companies. If the share price for the company increases, stock options can be very profitable for the employee. These stock options have certain rules governing when and how the option can be exercised.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

employee stock option

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Employee Stock Option

An option granted to an employee to purchase the employer's stock. Employee stock options to which special income tax treatment is accorded are known as statutory options.
Copyright © 2008 H&R Block. All Rights Reserved. Reproduced with permission from H&R Block Glossary
References in periodicals archive ?
We adopt the first requirement, which results in a potential sample of 815 firms, because employee stock options are material motivational mechanisms in knowledge-intensive computer software firms.
We begin by describing the essential institutional details of employee stock options necessary for our empirical work.
Google repriced its employee stock options one for one.
Because there is no reference market for employee stock options, SFAS 123 offers companies two ways of presenting their financial reports under Generally Accepted Accounting Principles (GAAP): Option-pricing model SFAS 123 originally referred to Black-Scholes and a "binomial model" as types of options pricing models that could be used for estimating the fair value of its options.
* Does mandated expensing of employee stock options have a clear or widely accepted rationale?
Liang and Sharpe note that employee stock options involve a transfer of wealth from shareholders to the employees who exercise options.
Avanza Bank Holding AB (STO:AZA) has said that its share capital and number of shares outstanding have increased following the completion of a share issue as a result of the exercise of employee stock options.
While no laws or regulations prohibit the grant of properly authorized in-the-money employee stock options, these grants must be accurately recorded for financial reporting and tax purposes.
But because employee stock options can't be traded publicly, their fair value is not readily available and must be estimated using option-pricing models.
Such an acceleration entails that participants, to a certain extent, are allotted shares or employee stock options already during the current year and, thus, social security and other costs will arise.
Namita Arora (name changed), a manager with a leading private sector bank, sounds excited while confirming the news that she and her other seniors have been rewarded with employee stock options plans (ESOPs), worth around Rs 11 lakh each.

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