Many Wall Street-listed companies have been giving a glimpse recently into the value of options exercised by employees last year. In their 20-F filings with the US Securities and Exchange Commission, the companies, including Israeli companies listed on US exchanges, are required to provide details of options held by employees and the benefits they embody, that is, the difference between the option exercise price and the market price of the company’s stock.
Employees of technology companies generally receive stock-based compensation as part of their conditions of employment, in the form of options or vested shares. In the case of options, this is a right to buy shares of the company from a certain date in the future on which the option matures, at a preset exercise price. If on a certain date an employee wants to exercise options that have matured and that have an exercise price of $20, while the market price of the stock is $100, then the benefit embodied in the option, its intrinsic value, is $80. If, however, the market price of the stock on that date is $10, then the option is “out of the money”, since it is not worthwhile for the employee to pay the exercise price. In general, in good years on the stock market, the benefit embodied in options rises, as the stock price rises.
One of the most prominent Israeli companies traded in New York, Wix.com (Nasdaq: WIX) released figures on employee options last week. The company, which has a market cap of $9.6 billion, reported that the intrinsic value of options exercised by its employees had grown. At Wix, the intrinsic value of the options exercised by employees in 2024 rose to $102 million, from just $19.5 million in 2023. The value has fluctuated in recent years: it hit a peak of $436 million in 2020, but in 2022 it was as low as $11.8 million.
The average exercise price of the options held by Wix employees at the end of last year was $107.82, while Wix’s share price was over $172. The intrinsic value of the options currently exercisable is $204 million, a sizeable sum, but it was higher at the end of 2024, before the recent fall in Wix’s share price. So far this year, the intrinsic value of the options has fallen by $133 million (on paper).
Wix, headed by co-founder Avishai Abrahami, enables small and mid-size businesses to set up and maintain websites. In 2024, when the technology-laden Nasdaq index climbed 28.6%, Wix’s share price jumped by 74%. In the past few months, however, the trend has reversed. Wix’s share price is almost 40% off its last peak, and it has fallen by 15% so far this year.
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Another company to have released employee options data for 2024 is Nice (TASE: NICE; Nasdaq NICE). The company, which provides risk management and customer relations management solutions, has suffered from negative momentum since Barak Eilam stepped down as CEO last year. Despite the rises on Wall Street, Nice’s share price ended the year down 15%, and it has fallen a further 7% in 2025 to date.
The intrinsic value of options exercised by Nice employees (the company includes in the figure shares that have reached the end of the vesting period) was $191 million, up from $138 million in 2023, despite the decline in the stock price last year. At the end of 2024, Nice employees held 491,000 exercisable options, with an average exercise price of $57.58, at a time when the market price of Nice stock was nearly $157. The intrinsic value of these options is currently $48.7 million. Because of the decline in Nice’s share price this year, the intrinsic value of exercisable employee options has fallen by $6.4 million.
Published by Globes, Israel business news – en.globes.co.il – on March 24, 2025.
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