The next dimension to consider is the coverage of your stock options strategy.
Who should be granted stock options?
Should it be granted to everyone or only to a select number of people?
There are multiple perspectives to consider here.
First, based on your values and vision, what is the kind of culture you think would be
right for your company?
Does that culture envision everyone receiving stock options or only a few people?
Second, what is your expectation from the team members who are granted stock options?
Do you expect them to behave differently once they become option holders?
In that case, you would need to consider if the recipients have the maturity to appreciate
stock options and the responsibility that they might convey.
Everyone understands what they mean.
If you do well, I will become rich, but understanding is not the same as appreciation.
For instance, you might want to consider if the recipients have the ability to take a big picture view of the organization
or are they too junior or inexperienced to do that at the moment.
Third, where do they sit in your compensation framework for the recipients?
Consider this.
You pay a salary to someone.
By virtue of receiving that salary, they are expected to contribute to a certain extent
or bring about a certain growth rate.
Salary is usually paid with certain expectations of performance or delivery.
If stock options sit over and above the cash compensation, what do you expect the recipients to deliver
beyond what they are to deliver for their salary?
Or do stock options fill in for the reduction they agreed to take on their salary?
Fourth, while you might be granting stock options with an expectation to motivate the recipient,
does the recipient view these options as motivating?
Sometimes certain people are better motivated through immediate cash rather than a distant long-term reward.
Fifth, do you have a sufficient stock option spool to grant an adequate number of options to all the recipients?
This is something we will cover in the next dimension, but as I mentioned, a few dimensions overlap
and certain forces may act against each other.
You need to consider these perspectives, balance them according to your values and vision,
and take your decision accordingly.
So please consider them one at a time when you design your policy.