THE REAL winners in this scenario are the 1 percent wealthiest families, most of whom do not work, who reap a major windfall from our friend's labors. The 1 percent wealthiest families own about half of all stock, so they own hypothetically half of XYZ stock. Still, I must admit employee stock options are a step in the right direction. In granting to employees a right to pocket the increase in stock's value, option companies implicitly recognize that employees have a right to wealth they help create. Or perhaps I should say they're a big toe in the door, and that door should open much wider.
Options are a good move, but a small one.
Employees still must buy the stock, when many lack the wherewithal to do so, since the corporation's overall aim is to hold wages down. Stock options thus discourage long-term employee ownership. There are more direct, long-term ways for employees to share in the wealth they create, like profit sharing, Employee Stock Ownership Plans, or other forms of real employee ownership. Employees are making enormous contributions to companies today, and they should have an ownership stake equally as enormous. Stock options may be a step in that direction.