Incentive Option (Noun)
Meaning
An option granted to corporate executives if the company achieves certain financial goals.
Classification
Nouns denoting acts or actions.
Examples
- The incentive option allows the CEO to purchase shares of company stock at a discounted rate if quarterly earnings exceed projections.
- As part of the new contract, the CFO was offered an incentive option that would vest if the company reached a certain level of profitability.
- Incentive options can be a valuable motivator for executives, as they provide a direct link between performance and personal gain.
- The company granted the executive team incentive options that would vest if the firm achieved a specific level of revenue growth over the next three years.
- The terms of the incentive option agreement required the company to meet or exceed a certain benchmark before the options would become exercisable.