NEWSLETTER-2017

41 COMMERCIAL LAW Stock Option Plans in Turkey* Att. Firat Coskun A “Stock Option Plan” (“SOP”) is an extremely popular method of attracting, motivating and retaining mostly the key employees, particularly when the company is unable to pay high salaries. This method is often used in the United States and European countries. Due to legal restrictions and lack of legislative background regarding SOPs, such option plans have yet to develop in Turkey. Upon the entry into force of the recent Turkish Commercial Code, SOPs did become exercisable in Turkey, however, and frequently preferred in publicly traded companies. A SOP gives a company the flexibility to award stock options to employees, officers, directors, advisors and consultants, allowing them to buy stock in the company when they exercise the option. Most companies, both at home and abroad, are utilizing this scheme as an essential tool to reward and retain their employees. Currently, this form of restructuring is most prevalent in start-up companies and in IT companies where manpower is the main asset. SOPs permit employees to share in the company’s success without requiring a startup business to spend precious cash. In fact, SOPs can actually contribute capital to a company as employees pay the exercise price for their options. The resulting economic wealth of employees who have held stock options have made SOPs a powerful motivational tool for employees to work for the company’s long-term success. Actually, SOPs have been used as a way for companies to reward top management and “key” employees, and to link their interests with those of the company and other shareholders. More and more com- panies, however, now consider all of their employees as “key.” Since the late 80s, the number of employees who hold stock options has * Article of June 2017