I know almost nothing about this, so as far as I understand stock options are like stock except they start from "0" and you can only cash out the positive difference?
Like you can only earn from the company's future growth.
A (call) stock option is the option to buy X shares at Y price by Z date (a put option is the same thing but to sell instead). You can go on any brokerage and buy a call option on Apple, for example, which would be the option (but not the obligation) to buy 100 shares of Apple at some strike price, say $200, by some date, let's say August 31, 2023. This privilege of having this option will cost you: let's say $2,000 (the real price is calculated via complex formulas). When August 31 comes around, you can either buy or not buy, but your $2,000 is gone either way. If Apple goes up to $300 on August 31, that option will now be worth $8,000 (($300 spot price - $200 strike price) * 100 shares - the original $2,000 it cost you to buy this option). If Apple went to anything below $220 ($220 - $200 * 100 - original $2,000), it wouldn't make sense to exercise your option since you would lose money. This is the basics of it.
It's generally not interesting for an employee to receive options because if the company doesn't perform well by the time your exercise date comes around or you leave the company then you get little or nothing. You would rather get stock grants which are shares that have value. If you get some shares when Apple is $200 and it goes to $100, you still have half the value of your shares.
Generally, in public companies (with extreme exceptions), options are issued to executives whose compensation is dependent on how much they can increase the company's share price. If they fail, they get little to nothing. If they succeed, they make a lot.
Thanks for asking. Let me know if you have any questions, I'd be happy to explain more.
Like you can only earn from the company's future growth.