Sounds like you have good intentions. However, the fact that your employees have no way to exercise those options may in fact be leaving them frustrated rather than motivated. They could argue - in their minds - that you will never "share" the value, yet you enjoy appearing "generous".
The way around this is to set a timetable and to communicate same to those employees you have given options to. They need to know when the options can be converted/vested into shares and at what price.
If the aim is to retain key employees then each batch of options should not be convertible till after say 3 years from being issued.
You should also let them know how many shares are outstanding or will be, and how you will calculate their price; say X times average earnings per share over the past Y years. You should also institute an "internal market" for your shares so that you or other employees can buy them should they need cash.
Is this answer helpful? Schedule a free consultation with Alfredo.
The Support You Need for Extraordinary Results
Business leaders shoulder immense responsibilities — from building client relationships to driving performance to fostering innovation. GUILD offers instant access to relevant experts, to help them overcome key challenges and tap fleeting opportunities.
We value your time. Our goal is to find the right expert for your needs – fast.
To Validated Experts
We prequalify every consultant on our website, and endorse them with our service guarantee.
Anywhere in the country
Constrained by local expertise? We help you hire the top specialists for best results.
1. Search & Shortlist
Search by the expertise you seek. Browse relevant profiles, and shortlist candidates.
2. Register to Schedule
Register as a client to schedule free initial consultations.
3. Choose an Expert
Choose your consultant and mutually decide the scope of work. We can help.