When is it created ?

• This is generally started as pool of shares at the beginning of the company , legalised by the board of directors and reserved for the employees.
• It is also considered as a stock issue event.

What is it ?

• Options to purchase a certain number of shares at a later time at a pre-defined price .
• The price is determined based on the current valuation of the company when the stock options are given to the emplpoyee and is known as strike price.

Why is it given ?

• This is one method of [[Compensation]] for employees.
• Buysing stocks = assests , hence the employee would have to pay taxes to something that isn’t necessarily bringing him revenue.

Resource : https://www.youtube.com/watch?v=jjcTcYK3MQI