We are a small but growing medical device company of 40 folks around the country and provide stock option grants to all employees (from VPs to assemblers). We are trying to institute a more formal process to determining how much to grant new employees. I was thinking that I could come up with a formula based on salary, but that seems to penalize those folks working in places where the cost-of-living is lower. Also, we wanted to move from grants every 4 years to annual grants. Does anyone have experience doing this and, if so, do you give an initially large grant and then smaller annual grants? What are the pros/cons? Any advice would be greatly appreciated.