In a survey conducted by Sifted among 198 employees of start-ups in Europe, more than a quarter (26.3%) believe that their stock options will allow them to invest in or start their own business. Meanwhile, 12.6% of respondents said that having options will allow them to end up with a life-changing amount of money.
The study proved that the promise of options effectively encourages people to join European start-ups. Of the 91.9% of respondents who have stock options, more than two-thirds (67%) would not have joined your company if they were not offered the options.
Equally difficult to build a successful team is being able to retain talent within a company. For this reason, companies use different forms of incentives, one of which is the promise of options – an option gives the employee the right to buy shares in the company at a fixed price after a certain period of time. This type of incentive has gained traction in companies in the technology sector, in startups, and beyond.
The purpose of such an incentive is to allow employees to own a part of the company, directly benefiting from its growth – As the company grows, the personal profit of the workers also grows. This also allows employers to reduce employee turnover rates, which can save the company money on employment and training costs.
Still, the numbers recorded in the survey carried out by Sifted bring some warnings. 44.3% of respondents said their company did not explain how to exercise options of stock purchases – which can influence the potential earnings of workers who hold options.
While the majority (58.6%) of employees at European startups know how much their options are worth, only 60.6% of respondents know their company’s latest valuation; 39.4% do not know how much their options are worth.
These numbers indicate that There is still a long way to go in terms of education about stock options in the European start-up ecosystem.
Source: www.jornaldenegocios.pt
