eXampleCG Enabling Excellence Forum

The basic theory of why companies issue stock options to their employees is fairly simple: The more that a firm's stock price increases, the greater the profit from exercising those options, creating what employers hope is a valuable incentive that will motivate employees to focus on making the company more successful and more profitable.

Read more at http://knowledge.wharton.upenn.edu/article/incentive-or-gift-how-perception-of-employee-stock-options-affects-performance/