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What is the purpose of giving stock bonuses to employees or management but locking it up,...

What is the purpose of giving stock bonuses to employees or management but locking it up, so they can’t have it or sell it for, let’s say, 5 or 7 years?

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Answer #1

company issue stock bonus with lock in period, by doing this employee will be eligible for stock bonus only after he complete the lock in period. Employee will be motivated to stay in the company and so that company will be able to retain talent

another benefit of stock option is company dont need cash outflow to provide stock option and at the same time they are rewarding the best employee.

Employee will be motivated to work so that if company do well share price will increase and employee will also get benefit from stock bonus.

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