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Define: Employee Stock Options

Employee stock options are stock options given to employees in addition to their regular compensation (salary + benefits) to encourage employees to work hard in increasing the value (stock price) of the company.

Employee stock options are not exchange traded options and are issued directly by the company to the employee without going through an exchange. Employee stock options typically takes a number of years to become fully vested (fully owned) and this encourages loyalty to the company.

Read the full tutorial on Employee Stock Options.