Slashdot Mirror
Stock Options - What's Fair?
will-code-for-options asks: "I work for a technology company that makes stock options available to its employees. Assuming there is a correlation between employee title/rank and the number of options awarded; what do hi-tech professionals consider a 'fair' stock offering to be? What would be a 'generous' offering? Obviously there are a tremendous number of variables that influence a company's stock offering policy; all I'm really looking for are some data points to help serve as a guide. The (potentially complex) responses to this question could really help those of us who haven't had experience with the stock option lottery." Ask Slashdot last touched on this subject in the early days of 2000...needless to say that the economic climate has changed since then. Are stock options still worth anything, in today's economic climate, or should they be avoided?
Oh I've been getting them ... they just aren't worth anything.
/. would know at least by name. The exercise price for the options ranges from $3something to over $35.
... I bought about 750 shares at $17.50 in the year before the bubble burst. They were worth 5x what I bought them for at one point and within a couple of months they were also worth less than $5. At this point I'm considering selling them for a loss as a tax shelter next year.
Since 1999 I've got probably 17,000 options for the company I work for (I'm posting anon since my previous posts would identify said employer) in the computer field. A fairly large company that anyone who reads
Of those 17,000, only 2,000 are going to cost me less than they are worth, and only by a bit over a dollar. Those haven't started vesting yet, either. Of the rest the exercise cost is $168,000 and their market value is $42,000 (at one point they were worth nearly $750,000 on paper but weren't vested so I couldn't exercise). Of course, most of those have at least partially vested by now but they're upside down.
I also participated in an employee purchase program
Options are a leash if you buy into them. I've been with this company for 4 years yet it will be another 4 years before I see anything significant from the stock options (and that's not counting the loss from the purchase program). Don't let options be a part of your decision to go to a company unless you vest FAST or you are so brainwashed that you -know- the company will be growing in 4 years.
They are great if you get lucky and make money, but it is no guarrantee. Don't let the offer of options let you settle for less salary than you are worth. I'm lucky, my salary is probably a good bit MORE than I'm worth, so I just look at the options and cynically chuckle.
FYI, www.mystockoptions.com has many useful tools to help people manage their options and do calculations on them.