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Why do you think a company owner may give one of the important employees some shares in his company? Think in negative and positive intentions.

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Question added by Tarek Krayem , Deputy General Manager & Director of steel structures and Constructions Dpts. , United Fabrication Ltd. United Steel Group
Date Posted: 2013/11/10
amer jayyousi
by amer jayyousi , Business Development Consultant , freelance

this is a common practice amongst law firms and medical clinics in usa,but it is  a common practice within many firms and industries.

the main reason being to keep a profit and value generating successfull, full trained,employee from leaving the firm by offering him a partner or limited partner title with a measured and accepted benefit package.

it is a value added for both parties.

 

Maria Janice Buco
by Maria Janice Buco , Production Operator / Trainer / Work Leader , Toshiba Information Philippines Inc.Corp.

In my opinion the owner wants to know more about the strategy of negative and positive feedback. ...

Khalid Noor
by Khalid Noor , Accounting Manager , FedEx

Many companies use employee stock options plans to retain and attract employees, the objective being to give employees an incentive to behave in ways that will boost the company's stock price. 

 

 

Another substantial reason that companies issue employee stock options as compensation is to preserve and generate cash flow. The cash flow comes when the company issues new shares and receives the exercise price and receives a tax deduction equal to the "intrinsic value" of the Employee Stock Options when exercised.

Mohamed nawaz Jaleel
by Mohamed nawaz Jaleel , Business Analyst , badami logistics

the owner gives so, because, hes a profit making centre.....if hes to leave he becomes a competitor (negative), if hes to be retained and given shares, the owner gets profit so is his share holder who works for him (positive)

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