Telecom Eireann

Intel provides all its employees with stock options. The extent of options depends on the employee's grade and seniority. Options on 30,000 shares are worth about £1 million.

The 14.9 per cent equity being given to Telecom Eireann employees is to be split equally between the 9,000 strong workforce. The shares will be held in a trust and there is agreement that in the event of any future public flotation, employees will have an opportunity to buy more shares to maintain the 14.9 per cent shareholding. The question of shares for part-time and job-share workers has yet to be agreed upon, there is also no decision yet on how many shares employees will receive.

Executive Share Options

Under the terms of most schemes, key executives and others may participate at the discretion of the directors and after getting approval from shareholders.

Most companies don't permit the options to be exercised unless earnings per share reaches a certain level annually. Normally earnings per share growth of at least 2 per cent per annum compound above the increase in the consumer price index, over a period of not less than three and not more than five years is required.

The amount of options given to directors, depends on two main factors, the profitability of the company and the position of the director. A senior director of one of the larger plcs could expect to be granted between 30,000 and 100,000 share options annually, although the share price really dictates the number of options granted. The return of these options depends solely on the share price and the remuneration committee generally decides on how many individual options are issued.

For example, individual directors at AIB, according to last year's annual report, were granted between 25,000 and 220,000 new options. The majority of the directors involved exercised over 50,000 options.

At Bank of Ireland its annual report shows that only one director was granted 50,000 options.

At Golden Vale last year an executive share-option scheme was approved which saw a total of 755,000 options being issued to "senior employees".

Some companies allow executive directors to take part in an executive stock-option scheme and general employee schemes.

Ryanair

The Ryanair stock-option scheme is open to all its 1,000 employees and is costing the company £20 million. The number of share options available to an individual employee depends on which band they are in. But employees are entitled to share options approximately equal to their annual salary. For example, somebody on £10,000 would be entitled to about 10,000 share options over five years.

The share options are allocated to the employee over a five-year period and they cannot sell them until the end of the period. The options are given to the employee at the market price when the options are issued, so if they appreciate in value over the five years the employee is in line to make a significant amount of money, says the company.

The company estimates that when all the options are distributed to employees, their combined holding will make up about 3 per cent of Ryanair's issued share capital.

The share options will be issued first on June 12th when the company's results are published and the market price on that day will be important for the 1,000 employees who will get the options.

Intel

Intel provides all its employees with stock options and the number they receive, depends on several factors, including seniority and grade. Sources suggest that the stock options an average Intel employee receives each year would be in the region of several hundred.

Employee are granted a certain number of options as soon as they begin working and they can exercise them after one year, which is quite quick compared to some other companies. Every year, there is a performance review and employees have the chance to increase the number of options they hold. The company has been operational in Ireland since 1993, consequently the value of existing options are relatively modest. But as a spokesman for Intel points out, $100 of options granted five years ago would now be worth $630.

It is estimated that an employee would need options on about 30,000 shares to be worth £1 million. Employees are also permitted to set aside 10 per cent of their salaries to enable them to buy shares at 15 per cent below the market rate.