The differrence between options & bonus
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Overview of options & bonus
There are quite a few differences and similarities between options and bonus. To help you make a choice, we've listed the most important points below.
Compare the different plans below
What does it mean?
Options give the right to buy shares in the future.
A bonus is an agreement for compensation when certain targets are achieved.
How does it work financially for employees?
Stock options allow employees to benefit from an increase in the company's value.
Also, employees only invest when they exercise the options, so they do not lose their investment in case of a decrease in value.
Also, employees only invest when they exercise the options, so they do not lose their investment in case of a decrease in value.
Employer and employee agree on goals with corresponding compensation. If the goals are achieved, the compensation is paid.
What about employee engagement?
Employees receive shares only when they exercise the options. Only then do they get voting rights.
The bonus is not tied to the company's increase in value, so the employee does not directly benefit from potential increases in value. Also, the employee does not get voting rights.
What about tax implications for the employee?
The difference between the exercise price and the purchase price of the option is taxed as income.
A bonus is taxed as income. The amount of tax depends on the employee's income.
What are the costs?
This is just a contract. The shares only need to be notarized when exercised.
A bonus is just a contract. There are no costs outside the bonus plan.
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