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Basics: Benefits


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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.

Psychological Factors Affect Your Stock Option Exercise Decisions

Professor Steven Huddart
It is tempting to exercise and sell your stock options when your company's stock price hits new highs or becomes worryingly volatile. However, this decision may not be in your best long-term financial interest. This article exames the psychological factors that can, along with economic motives, influence your stock option choices.

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"

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.

When The Share Price Is A Factor In Pay

Kelley Holland
The New York Times
For many employees, stock-based compensation represents the biggest realistic chance of an increase in personal wealth, given small rises in average salary.

Google Options Make Masseuse A Multimillionaire

Katie Hafner
The New York Times
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.

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

Jessica Guynn
San Francisco Chronicle
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.

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)
Stock options have a positive impact on company culture, with modest effects on employee motivation and performance.

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Are stock options, restricted stock, and ESPP participation free?

By granting you a stock option, your company gives you the right to buy its stock at a fixed price during a specified period. Restricted stock is usually granted without any cost to you. With an employee stock purchase plan (ESPP), you do have a cost when you buy shares. For companies, stock options, restricted stock, and ESPPs are not free...

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

A company may make these grants for a variety of reasons. Surveys show that...

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?

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?

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 or another type of equity compensation?

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

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?

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?

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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Featured FAQs
NEW! If my stock options are scheduled to expire on a holiday or a weekend, is the last possible exercise date before or after then? This is premium content
You need to check your stock plan's provisions and the procedures/practices followed by your company or any outside stock plan administration firm. Usually...
NEW! If I lose my job but I am then rehired, can unvested stock options be reinstated, or can the exercise period of my vested options be extended to the end of the original term?
While being rehired is great news, the bad news is that the unvested options were canceled or forfeited when you were laid off, regardless of the reason for termination. As for the vested options...
NEW! Do you have a simple chart that compares the tax treatment of stock options, restricted stock, RSUs, and ESPPs?
The chart below gives the types of taxes, and when they are triggered, for various forms of equity compensation granted in the United States...