Stock options

Stock options give their beneficiaries the right to acquire shares in the company at a predetermined exercise price (strike price) during a defined period. They are a long-term equity incentive for employees and directors, aligning their interests with shareholder value creation. Their valuation uses option pricing models — Black-Scholes or binomial — accounting for volatility, risk-free rate, maturity and exercise price. In valuation, outstanding options are integrated in the fully-diluted equity value calculation. Under IFRS 2, stock-based compensation must be recognised as a personnel expense based on the grant-date fair value.

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Example: a Swiss company has issued 50,000 stock options at CHF 80 strike price with CHF 120 current share price and 2-year remaining maturity. Black-Scholes value (30% volatility, 1.0% risk-free rate): CHF 42 per option — total value CHF 2.1 million representing a 5% potential dilution, integrated in the fully-diluted valuation and recognised as CHF 2.1 million of IFRS 2 expense amortised over the vesting period.

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Hectelion values stock options for IFRS 2 purposes, due diligence dilution analysis and fundraising cap table modelling.