RE:Re miftee9
Warrants and options are different.. in simple terms:
Options allow an employee to purchase shares at a pre-agreed price and keep the profit, in the same transaction.
Warrants allow an empoyee to purchase shares at a pre-agreed price, however, they would need to purchased so the employee actually has the shares, then sold seperately.
In both cases if the share price falls below the option or warrant price, the employee
isn't making any money and isn't costing the company anything. Additionally, there are time limits placed on when you can make the transaction.
For an employee that is only paid on options (or has many warrants), are typically highly motivated to increase the share price.. higher the share price more money they make.
This one person with a million shares.. if the stock hits 5.82 he's up 5 millions dollars !!!!! Granted, if the stock is at $5.82 we probably will be having different conversations.
PS. for these employees, if they are being paid as a Canadian employee, and make money on the options/warrants, its considered capital gains thus only taxed of half the profit.