Your understanding of options evades me. The $1.25 strike price is what they have to pay to buy the shares. There is no loan. If they bought them today and sold tomorrow at $1.40, the profit would be $37,500 after they have paid the company treasury $312,500. If they hold them until the share price is $2.50 before exercising, the profit will be $312,500 but not before. If they can get the share price to $2.25 in short order I have no problem with guys of their calibre being paid with options instead of cash.