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Basics: Benefits


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Articles   (Jump to FAQs)

Stock Option Fundamentals (Part 1): Know Your Goals And Terms 

Marilyn Renninger
Stock options aren't just for the folks on mahogany row any more. But turning stock options into the real green stuff takes some know-how. You need to know certain features of your grant to decide when to exercise your options and sell the stock.

A Financial Advisor's View Of Your Stock Plans  This is premium content

William Baldwin
Rather than providing you with a guarantee, today's benefit plans offer only an opportunity to attain financial security. The decisions you must make will turn some of you into financial winners.

Stomach Volatility In Your Company's Stock Without Losing Your Mind 

Joanna Glasner and Bruce Brumberg
Don't be discouraged by stock market volatility and underwater stock options. As the experts note, stock grants are tools for building wealth in the long term.

Manage Your Expectations To Avoid The "Option Blues"  This is premium content

Loren Rodgers
You feel let down by your stock options. Your company's stock price has dropped, leaving you with underwater options, and the cash flow from expected option riches has evaporated.

Google Options Make Masseuse A Multimillionaire

Katie Hafner
The New York Times, 11/12/07
A happy tale about the difference that stock options can make in the lives of ordinary workers, especially at pre-IPO companies which become successful and then go public.

YouTube's Making Millionaires In The Lower Ranks

Ben Charny
MarketWatch, 2/9/07
The YouTube millionaires are a dramatic, if unusual, reminder of the riches that stock options can create. The YouTube phenomenon may even give stock options new luster as a technique for recruiting employees.

Options Have Lost Their Luster, But Many Still Lust For Them

Jessica Guynn
San Francisco Chronicle, 11/12/06
Stock options remain a powerful lure for attracting employees to private companies, although attitudes and expectations have changed. Stock options let you participate in the value you're creating at your company, and their potential ranges from substantial wealth to nothing at all.

Startups And Stock Options

Tom Taulli
Forbes, 5/16/06
Stock options remain alive and well at early-stage companies, which continue to embrace the idea that talented workers with entrepreneurial foresight and a belief in the business will accept options over cash for a chance of large financial gains in the future. An ownership culture fostered by stock options can also align the goals of managers and staff.

The Effects Of Stock Ownership On Employee Attitudes And Behavior: Evidence From The Rewards Of Work Studies

Gerry Ledford, Matthew Lucy, and Peter LeBlanc
Perspectives (Sibson Consulting), 1/5/04
Stock options have a positive impact on company culture, with modest effects on employee motivation and performance.

Stock Options For All!

Christopher Farrell
BusinessWeek, 9/20/02
Much of shareholder value in the new economy is created by a corporate culture that values human and intellectual capital throughout the organization. (Registration is required.)

Employees Still Crave Options

Craig Schneider
CFO.com, 11/08/00
Has volatility in internet and technology stocks soured employees on stock options? Surprisingly, no.

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FAQs   (Jump to articles)

Are stock options free?  This is premium content

By granting you a stock option, your company gives you the right to buy its stock at a fixed price during a specified period. This right does not cost you anything. However...

UPDATED! Why do companies grant stock options and other equity awards? How many people have them? 

Companies make these grants for a variety of reasons...

Do stock options really motivate employees?  This is premium content

The National Center for Employee Ownership cites part of a study on whether options really motivate, attract, and retain workers...

Why do stock options offer greater financial benefits than simply buying shares of company stock in the open market?  This is premium content

Stock options give you the opportunity to buy shares of stock at a price that is fixed on the grant date, regardless of what the market price is when you exercise...

Why should I care about stock options?  This is premium content

Stock options allow employees and other service-providers to share in the growth of a company's value without risking their money until they exercise the options to buy the shares...

How can I find out whether my employer offers stock options?  This is premium content

If your employer is a publicly traded company (e.g., on a stock exchange such as NYSE or NASDAQ), your employer is required to file...

Why doesn't my employer offer me stock options? 

If your employer is a for-profit corporation, it probably can offer stock options to its employees. There may, however, be many reasons why your employer is not offering options...

If I remain with the company for the duration of the vesting schedule, is there any way I can lose the benefit of my option? 

You could mistakenly let the options expire without exercising them. You do not have your vested options for life...

How does a "clawback" work to take away stock grant gains?  This is premium content

A clawback is triggered when you leave to work for a direct competitor or engage in...

What are the benefits of participating in an employee stock purchase plan?  This is premium content

You become an owner in your company, with all the financial upside and risks that any investment can bring. By participating in the plan...

How much will my options be worth in the future?  This is premium content

The future value and its certainty depend on whether you are at a public or a private company. You determine the practical cash value of options in public companies by noting the...

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Annotated diagram of Schedule DTax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.

Featured FAQs
NEW! Can I sell my company stock through a blind trust as a defense against insider trading? This is premium content
Using a blind trust goes beyond the protections of Rule 10b5-1 plans, yet has more restrictions. These are irrevocable grantor trusts with...
Which do companies grant more often: restricted stock or restricted stock units (RSUs)? This is premium content
Starting with the broad grants of RSUs at Microsoft and Amazon, recent corporate practices suggest it is more likely that your company will grant you...