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The rise of employee stock options
In Lesson 10
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Money 101 Lessons
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Employee stock options used to be reserved for the executive suite. No longer. From cash-poor Silicon Valley startups to old-line manufacturing and service firms, more and more companies are offering stock options to the rank and file as well.
The National Center for Employee Ownership (NCEO) estimates that about 9 million Americans hold stock options and that the plans account for at least several hundred billion dollars.
In 1990 there were only about 1 million workers covered by a few hundred stock option plans. Today there are nearly ten times that many employees participating in some 3,000 plans.
Still, management continues to receive the lion's share of stock option grants. Of companies that grant options to more than half their employees, nonmanagement receives 45 percent of total options allocated, on average.
At the largest companies, this average is 29 percent. At biotech and computer firms, however, 55 percent of option grants go to nonmanagers.
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