NCPA - National Center for Policy Analysis

Stock Options For The Rank And File

September 7, 1998

Employees in the lower rungs of corporations are enjoying a new benefit previously available only to executives -- stock options. Such compensation programs usually allow employees to purchase company stock on generous terms.

According to a survey by consultants William M. Mercer Incorporated:

  • More than a third of large U.S. companies now have broad-based stock-option plans covering all or a majority of their employees -- more than double the proportion as recently as 1993.
  • Almost half of this group indicate they are actually implementing broad-based programs this year -- three times as many as did so five years ago.
  • Personnel experts report the greater availability of options can ease tensions over high executive compensation and give workers a stake in a company's long-term growth.

Stock options are also useful in helping to recruit and retain skilled workers in today's tight labor markets.

Source: Gene Koretz, "Stock Options for the Ranks," Business Week, September 7, 1998.


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