What is a feature of share options as a form of compensation?

Share options are a form of equity compensation that gives employees the right to purchase shares of the company at a predetermined exercise price, often referred to as the strike price. This feature incentivizes employees to work towards the company's success because if the company's share price increases above the exercise price, employees can buy shares at the lower price and potentially sell them at the market price, realizing a profit.

This form of compensation aligns the interests of employees with those of shareholders, as employees benefit directly from an increase in the company's stock price. The certainty of the purchase price set at the time the options are granted provides a clear benefit for employees, encouraging loyalty and motivation to see the company perform well.

The other features mentioned in the other choices do not accurately describe the nature of share options. For instance, having a right to sell shares at market price does not relate to the actual function of a share option, which is about purchasing shares rather than selling them. Similarly, options do not grant the right to restore lost shares at any time or tie compensation directly to company profitability without also considering stock ownership benefits. Thus, the correct interpretation of share options involves the right to purchase shares at a pre-established price.