He forced all Pixar employees to give up their options as part of his agreement to add another round of personal funding in 1991.

What does "options" in this sentence mean?

  • 11
    Can you clarify which part of this sentence you don't understand? – Cantalouping May 15 '17 at 7:47
  • 1
    In particular, are you asking about the content of the sentence? In that case, Economics might be more helpful. – Jörg W Mittag May 15 '17 at 15:02

It sounds like as part of their employment benefits, Pixar employees had stock options (a contractual right, i.e., "option", to buy company stock at a pre-agreed price, regardless of its price on the open market).

Somebody (owner, CEO, major investor?), was contemplating pumping money into the company by buying a lot of stock, which would be expected to cause the market value of the stock to go up, rewarding that investor.

If Pixar employees were to exercise their options, that could have a contrary effect. For example, if the Pixar employees were to then buy stock at a guaranteed cheap price, they could turn around and sell it at the new high market price for some quick profits. That stock dumping would drive the stock price back down, hurting that investor.

So a condition of his agreement to invest in the company was that the Pixar employees give up their stock options.

  • For context, it's a line from Steve Jobs' biography, regarding his time at Pixar (which he was one of the founders of). – GeoffAtkins May 15 '17 at 15:53
  • They're called "options", because you have the "option" to buy (or sell) shares at a fixed price at some point in the future. – Roger Lipscombe May 16 '17 at 11:03

Does it help if we break the sentence up?

  • He agreed to add another round of funding [i.e. to invest more money] in 1991.

  • As part of this agreement, he required all Pixar employees to give up [surrender] their options [that is, their right to purchase shares in the company]

  • 1
    It's a good lesson for those of us who write English which will often be read by non-native English speakers, that it's very easy to slip into using words that have both a general meaning and a specialist meaning without making it clear that we're using the word in a technical sense. – Michael Kay May 16 '17 at 9:58

This sentence refers to Steve Jobs, and is taken from the biography written by Walter Isaacson. The context is this. Steve Jobs had invested quite a lot of his own money in Pixar, and before investing more, he wanted existing employees to give up their options (pre-existing rights to purchase shares in the company). By forcing employees to give up their options, Steve Jobs would be able to maintain closer control of the company, and reduce dilution of ownership across the employee group.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.