Understanding Employee Stock Options
employee stock options guide for sale. When
accepting stock options as a part of an overall compensation package, the
employee needs to carefully review two documents:
I have found that many employees have no real
understanding of the necessary questions to ask when
negotiating the equity (stock option) portion of their overall
Use this checklist as you prepare your research for a
salary negotiation, or your next performance review, or when you are in
line for a promotion. Some of these questions are essential to
understanding the value of your stock option award, and others simply help
explain the implications of certain events or situations.
Don't be surprised if you have options now and can't
answer some of these questions - they're not all obvious, even to people
who have received stock options before.
The ten most important questions about your stock
options are as follows.
What type of options have you been
How many options do you get?
How many shares in the company are
outstanding and how many have been approved?
What is your strike price?
How liquid are your options, or how
liquid will they be?
What is the vesting schedule for your
Will you get accelerated vesting if
your company is acquired or merges with another company?
How long must you hold your shares
after an IPO, merger, or acquisition?
When you exercise your options, do you
need to pay with cash, or will the company float you the exercise
What kinds of statements and forms do
you get or do you need to fill out?
Especially if you are in a privately held company.
The burden is on the employee to educate his or herself on how much they
are worth in the marketplace. Additionally, I have worked in companies
where the senior management team did not understand the simple mechanics
of stock option pricing. The pointers in the document for sale below
are proven and sound. They will help you get a better deal.
If you are in a pre-IPO company, how well you negotiate
your option package could very well be the difference between tens and
hundreds of thousands of dollars if your company is acquired or goes
Downloadable Microsoft Word file, 21 Pages