Some private companies may do that, but not many, and not that much. There are significant potential problems to doing that. The most obvious is to avoid diluting family/closely held control, which may not be a problem if such awards are minor. However, it also exposes the company to problems of how to deal fairly with these shareholders, since there is not active market for the stock.
A much bigger problem is that, if you get too many shareholders (and it doesn't take all that many), you can become subject to the need to file with the Securities and Exchange Commission (SEC). That can be quite onerous. This is a big incentive for companies to "go private"--to avoid the need to go through all the extra compliance, etc. The most common way to get around all this is to issue what is called "phantom stock", or "shadow stock". These are merely certificates that entitle the holder to share, at some usually defined rate, in dividends and stock value (value being determined by formula). There are typically no voting rights, and it's not real stock ownership, thus no capital gains benefit when you cash out. Since it's not real stock, there are no SEC rules to worry about. So, you usually have to look pretty hard to find a private company that uses real stock for bonuses or other compensation. Those that do, do it probably only for a handful of critical employees. Dave W7AQK ------------------------- Tom, N5GE said: Not being public may be one of the reasons they are so successfull. Outside stockholders can make life miserable for companies like Elecraft. Many privatly held businesses award uotstanding employees stock as rewards for their service. Tom, N5GE ______________________________________________________________ Elecraft mailing list Home: http://mailman.qth.net/mailman/listinfo/elecraft Help: http://mailman.qth.net/mmfaq.htm Post: mailto:Elecraft@mailman.qth.net This list hosted by: http://www.qsl.net Please help support this email list: http://www.qsl.net/donate.html
