I think I can do that:
OK say iEmployee is granted options on 1,000.000 shares at a certain point. The stock has been rising and at the strike date the stock is selling for $20 per share. Today it's selling for $30 per share.
He should have to pay iCompany 20,000,000 for the stock. He can of course sell it for 30,000,000 at today's prices.
Instead he's able to purchase it at 410 per share which is what it was selling for at a date previous to his strike date.
Instead of paying iCompany 20,000,000 he pays iCompany only 10,000,000 for which means iCompany is out 10,000,000 which makes the equity value of what stockowners own that much less.
Do I have it right? |
