In general, employee stock options (ESO) issued by companies cannot be traded on the stock exchange and ESOs are given or sold to company employees at a certain price and for a certain period of time. If the type of shares owned by employees are open shares or those that can be traded on the stock exchange, then if the issuer's share price rises, the employee can sell them on the open market and will get a capital gain.
What are the Benefits of Employee Stocks?
- Thread starter Suba
- Start date
I do not really know much about this, but i have heard about it before. These stocks are given to the employees alone in most companies. While in some cases every employee must have a share. Its also a way to boost the sales of the company stock and as well get the employees more involved in making the company grow.
When an employee invests in a company, the company may flourish even more by the passage of time. This is because employees invest their cash and this may also have some beneficial effect on the stocks of the company.
You have a valid point! Some companies would always give shares to employees that have diligently discharge their duties accordingly . In reality,such kind of shares is like a compensation for the employee.
When I was working full time, I have worked for a start-up. Since they cannot afford to give me a competitive salary, they offered me shares in the company. I accepted the offer. The company has grown successfully. I am still receiving dividends from the shares I have with the company.
- Thread starter
- #7
That's one of the advantages of having employee shares, as long as you don't sell shares, you will continue to receive dividends even though you have retired. Usually the company also issues a policy of giving discounts to employees for buying shares.
- Thread starter
- #9
Employee shares are not only in the form of incentive shares which are given only to outstanding employees or company managers, there are also unconditional shares which are given to all levels of employees, either free or purchased. There is also employee stock ownership, in which companies give all their employees the right to buy shares prior to the launch of the IPO.
Employee stocks constitute one of the important avenues through which a firm may earn the trust, support, and loyalty of its staff. Employees owning stocks are bound to work extra hard to ensure that a company succeeds in attaining its business objectives.
I think that the employees of certain kinds of companies could help encourage people to purchase the shares of a company and this could boost the financing of the company.
It makes sense but a lot of companies will not want to do this. You find it very hard to see a company that will decide to give shares for the people who work under them. That is a rare case
