There are two common ways to distribute stock options to your employees:
- Stock options (of your own company)
In many start-ups, it is common to offer stock options on the company's own capital to employees.
These stock options give employees the right to buy shares of the company at a pre-agreed price during a certain period, the exercise period.
Important: You do not need to be listed on the stock exchange to offer stock options to employees!
Why stock options?
With share options, as with the profit bonus, the aim is to allow employees to share in the company's success. After all, they have contributed a great deal to it.
Stock options can be granted to the very first employees, top-notch employees or loyal employees. In such cases, it is all about rewarding the employees for the trust you place in them to take the company to the next level: stock options are granted in a tax-friendly manner at the current valuation of the company and can later (years later) be converted into shares that are easily worth ten times as much in the meantime.
As with warrants, you are completely free to decide to which employees you grant stock options.
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Warrants are a kind of stock options. With warrants, you actually give options on shares of listed companies (for free) to employees, who then immediately (or later) sell these shares again.
If the shares are sold again immediately, no social contributions have to be paid on this selling price (neither by the employee, nor by the employer). The employee only has to pay withholding tax on this amount.
Specifically, you can order warrants from your bank or from a third party such as Bluetrees.
Terms and conditions Warrants
- The amount of the warrants may not exceed 20% of the employee's annual fixed (and variable) gross salary;
- Warrants cannot be part of a wage swap with the fixed gross wage;
- In a cafeteria plan, a cash bonus can be exchanged for warrants.