What is exercise price in SAP PA-EC - Enterprise Compensation Management?

SAP Term: exercise price

• Component: PA-EC

• Component Name: Enterprise Compensation Management

• Description: The amount an employee has to pay per share to buy his/her stock. Also known as strike price.

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• Key Concepts: 
  Exercise price is a term used in SAP Enterprise Compensation Management (PA-EC) to refer to the price at which an employee can purchase a stock option. It is the price that the employee must pay to exercise their option and purchase the underlying stock. 
  
  How to use it: 
  In SAP PA-EC, the exercise price is set by the company when they grant the stock option to the employee. The exercise price is typically set at the current market price of the underlying stock at the time of grant. The employee can then exercise their option at any time before it expires, provided that they pay the exercise price. 
  
  Tips & Tricks: 
  When setting an exercise price, it is important to consider how volatile the underlying stock is. If the stock is highly volatile, then it may be beneficial to set a higher exercise price in order to protect against potential losses. 
  
  Related Information: 
  The exercise price is just one of many terms used in SAP PA-EC. Other terms include vesting period, strike price, and expiration date. It is important to understand all of these terms in order to effectively use SAP PA-EC.