In your example, the investor's purchase costs her $20,000. This $20,000 comes from what's left after paying tax on a much greater amount earned.
If the investment appreciates, this investor is rewarded: If not, the the investor loses.
The employee pays nothing for the options because they're granted. The only reason she gets options is because she works for the company. This is, and should be, taxed as income. Similarly, her salary is only paid because she works there, and this too is clearly income received as a result of employment. I think company supplied cars and other benefits get taxed similarly too. (They do in my country.)
The employee doesn't face the same risks as the investor. Even if the options expire worthless, the employee, with a cost base of zero, hasn't lost.
Hope this explains things.
Cheers, PW. |
