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Stock option program

Stock option program

A stock option program gives, for example, employees the right to buy shares in the future.

What is a stock option program?

A stock option program means a limited company gives certain people — often employees or key individuals — the right to buy shares in the future at a set price. Options are used to attract, retain and motivate staff, especially in startups.

 

How do options affect ownership?

When options are granted and later exercised, they can lead to new shares being issued, affecting the share capital and the cap table. There are different types, such as warrants and employee stock options. All option-related events should be recorded so the share ledger and future ownership stay traceable. NVR lets you manage all types of options — see how.

Record options
Henrik Kristensen, NVR
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Related terms

Employee stock option

An employee stock option gives an employee the right to buy shares in the company in the future.

Cap table

A cap table is an overview of how ownership in a company is distributed among its shareholders.

Share capital

Share capital is the capital the shareholders contribute to a company in exchange for shares.

Share issue

A share issue is when a limited company issues new securities, usually shares, to raise capital.