stock option incentive
An
incentive plan for executives whereby an employer offers to sell the
company's stock to the executive at a certain price on a certain
date. It is in the executive's interest for the company to do well
and the stock's value to rise. If the stock's value does rise, the
executive may, by exercising the stock option, be able to buy the
company's stock at a price below the stock's market value, thus
making a paper profit (if the stock is or must
be held) or a
realized
profit (if
the stock is sold at the
higher price).
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