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There are five basic kinds of individual equity compensation plans: stock options, restricted stock and restricted stock units, stock appreciation rights, phantom stock, and employee stock purchase plans. Each kind of plan provides employees with some special consideration in price or terms.

For companies with fewer than 20 employees that will stay that size, that do not plan to go public, and that do not want or cannot do an ESOP

It's inevitable. As more people get stock options, there are going to be more lawsuits over how these plans are run. While far from a comprehensive list, there are some common issues that come up in these suits that careful plan design can help avoid.

Users of this site often ask us what steps they should take to get educated about making a decision about an employee ownership plan. This article outlines the basic steps we recommend.

This concise tables compares four major forms of employee ownership in the United States on sixteen criteria, such as typical use, tax treatment, governance, cost, and employee benefit.

By Corey Rosen, NCEO Senior Staff Member April 2012

Under Rule 701 of the Securities Act of 1933, companies can offer their own securities as part of written compensation agreements to employees, directors, general partners, trustees, officers, or certain consultants without having to comply with federal securities registration requirements.

During the 1990s, according to our research here at the National Center for Employee Ownership, the number of employees getting stock options ballooned from less than one million at the start of the decade to about 10 million by the end.

By Corey Rosen, NCEO Senior Staff Member I have had dozens of conversations with business owners who want to share equity with some or all employees over the past several years. I start by asking what they are thinking of doing. With almost unfailing consistency, they say:

Incentive stock options (ISOs) can be an attractive way to reward employees and other service providers.