Employee stock options are the "currency of the realm" in many industry circles these days. High-tech startups with their millionaire secretaries make for popular reading and dreaming. More than 10 million workers have stock options as part of their compensation packages, according to some estimates. Despite all their glamour, there is no guarantee that stock options are winning lottery tickets.
This short work takes some of the mystery out of the employee stock option process. Stock options offer the opportunity for real financial gain, but you must make decisions along the way that can dramatically affect the actual benefits you receive.
You may want to read the whole book even if you only are eligible for one type of option. Oh, you didn't know there was more than one type of option? This important information will help you make the right decisions about exercising and paying for options. It will also give you some basic tax information, although nothing in this book should take the place of professional tax advice.
The book also introduces you to some alternative forms of equity compensation such as employee stock purchase plans and employee stock ownership plans.
The short lessons make it easy to grasp each topic in a relatively short time period; say, 10 minutes. You may not be an expert on employee stock options when you finish this book, but you will be able to make better decisions about this important form of compensation.
There are many things to learn before making your decision to purchase stock option plans. Use the information in the chapters to guide you in your decisions. Scattered throughout the pages are sidebars with useful information, tips, and warnings to help you make decisions that could affect the benefits you receive.
Plain English
This sidebar defines terms and basic concepts dealing with employee compensation.
Tip
Here you'll find tips on how to reap the benefits of employee stock options.
Caution
Take these sidebars seriously—they help you make the most of the employee stock option process.
I would like to thank Renee Wilmeth at Macmillan for giving me the opportunity to do my third book with this fine company. Thanks also to Joan Paterson for guiding me through the process and offering constructive suggestions. Thanks also to my wife, Cyndy, who gave up part of her summer so I could finish this book.
All terms mentioned in this book that are known to be or are suspected of being trademarks or service marks have been appropriately capitalized. Macmillan USA, Inc., cannot attest to the accuracy of this information. Use of a term in this book should not be regarded as affecting the validity of any trademark or service mark.