Stock options as a long-term pay for performance can reduce agency costs to shareholders, and enhance the motivation of top management and employees by rewarding the future performance in firm value. Whereas larger firms adopt this system to strengthen their employees commitment to organizational goals, start-up firms tend to utilize it to attract skilled, competent people in the short term. This study looks at driving forces and patterns in the adoption of stock options for the Korean public firms under a recent institutionalization of the stock option system for both new venture firms and existing larger firms. Individual firms` technology level, growth potential, and liquidity are hypothesized to influence the adoption of stock options. We test and discuss the hypothesized relationships using archival and survey data.