Stock options have arrived in Canada
28 February 2001 -
Stock options are becoming an important recruitment and retention tool for top
talent in Canada. They benefit employees but also help companies grow - businesses
with stock option plans are expected to expand as much as 11% faster than those without,
according to Assessing The Options: Stock Option Plans in Canada, a new report
by The Conference Board of Canada. The report also shows that smaller organizations which
are smaller and concentrated in technology or other high-skill industries have the most
aggressive stock option plans.
But stock option plans do not come without problems:
* When employees exercise their options to sell the result can be a lowering of
a company's earnings per share index.
* As some dot.com employees have discovered, stock options can become almost worthless
when a company's share price declines.
* There may be a weak link to employee performance if the a company's share value is
growing but the company is doing poorly when compared to its competitors.
"In an increasingly tight labour market, compensation is a critical lever
for organizations as they strive to attract, retain and motivate talented
employees," said Prem Benimadhu, Vice-President with the Conference Board. "In
an attempt to recruit and retain top talent, employers are now offering stock
options to employees at all levels within the organization. And this is just
the beginning."