Supplemental Analyses - Stock Options

 

Stock options have become a common method of enhancing employee compensation.  For many companies, it has become routine to grant key employees qualified stock options on an annual basis.  Under these options, the company guarantees to sell shares of the company's stock to the employee at some future date (possibly going out ten years), but locked in at the stock's current price.  Obviously, if the stock increases in value, as the company and employee both hope, the employee will realize a gain as soon as the options are exercised.

However, the value of this benefit as of the date of award is not always obvious.  Vocational Economics offers knowledge of compensation plans and the underlying financial theory to accurately adjust the employee's earning capacity to reflect a true value for these benefits.