Some companies have plans that allow employees to purchase shares on favourable terms. These plans may be organized under the following options:
(a) Under executive incentive option plans where key managers are given options to purchase shares. These managers usually have a direct, material influence on the company's fortunes and so if they perform well the stock prices will go up and the option will become valuable.
(b) There are plans for lower-level employees where the company uses its profits to buy the shares for the employees.