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Stock Option Plan Definition and Explanation PDF Download

Learn Stock Option Plan definition in hrm with explanation to study “What is Stock Option Plan”. Study stock option plan explanation with HRM terms to review HRM course for online MBA programs.

Stock Option Plan Definition:

  • Plan that gives employees the right to purchase a fixed number of shares of company stock at a specified exercise price for a limited period of time.

    Human Resource Management by Robert L. Mathis, John H. Jackson



Stock Option Plan Explanation:

A stock option plan is a mark that alludes to pay contracts between a business and a worker that conveys a few attributes of money related choices. Representative investment opportunities are usually seen as an unpredictable call alternative on the basic supply of an organization, allowed by the organization to a worker as a feature of the worker's compensation bundle. Controllers and financial analysts have since indicated that ESOs are remuneration contracts. These nonstandard contracts exist among worker and manager, whereby the business has the risk of conveying a specific number of portions of the business stock, when and if the representative investment opportunities are practiced by the worker. The agreement length fluctuates, and regularly conveys terms that may change contingent upon the business and the present work status of the worker.

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