An unusual approach to consultant compensation

When done right, stock options can be a useful tool for compensating independent contractors
By Peter Merrick
|Canadian HR Reporter|Last Updated: 05/30/2002

Over the last few years there has been a lot of talk about the value of employers providing stock option plans to employees and the favourable treatment these plans receive from the Canada Customs and Revenue Agency (CCRA).

However there has been very little discussion on the benefits of using stock options to compensate contractors and skilled independent consultants in lieu of money. It was commonly believed that by paying independent consultants in stock options CCRA would consider them employees. But this is not necessarily the case.

And although the poor performance of stock markets of late may suggest the appeal of stock options is not what it once was, organizations should explore this alternative form of compensation as a strategy for both good times and bad.