The myStockOptions.com Web Site: Something For Everybody
from The Corporate Counsel, May-June 2000
As we go to press, myStockOptions.com has just completed its beta testing — with over 40 companies participating (from eToys to Johnson & Johnson, and Staples). The site is now available to everyone. The reactions have been even more enthusiastic than we expected, confirming our assessment that there is a real void out there when it comes to providing useful information to optionees.
The in-depth content (with several timely articles, a global tax guide and over 300 FAQs covering almost every conceivable question from the most basic to the most sophisticated) provides optionees with the information they need (but often don’t receive or fully understand).
Perhaps, as importantly, the web site does an excellent job of conveying to optionees the value and purposes of stock options. In many different ways, the value of stock options (and holding on for the long-term) comes across. Even employees who have seen the short-term market value of their stock options drop recently will gain a better appreciation of what stock options are all about — and the importance of aligning employees’ interests with shareholders’ interests.
In addition to invaluable content, the site provides user-friendly interactive calculators and modeling tools that enable optionees to track their options—from keeping track of vesting and expiration dates to modeling and analyzing different projected exercise scenarios (including taxation). Interestingly, when an optionee plays with the various models for calculating the net proceeds of various exercise scenarios, and compares the alternative uses or investment choices for the sale proceeds, a few key messages come across. First, optionees gain a better understanding of the net proceeds they actually will receive (and are better prepared for the withholding tax bite upon NQSO exercises as well as the tax hit resulting from early ISO sales). Second, and most interestingly, by working through the numbers, it becomes clear that generally the most profitable approach to maximizing one’s gain is to hold the option for the long term. [Indeed, if a study is done down the road (e.g., by Messrs. Huddart & Lang — see their article on the myStockOptions.com site and see the September–October issue of the NASPP’s Stock Plan Advisor at pg 2 — whose studies have found that many optionees exercise too early), we suspect that there may be a significant difference between the exercise habits (and employee satisfaction/retention) of those optionees that are using myStockOptions.com versus those that are fending for themselves.]
Benefits — Even Customized Electronic Delivery of Plan Documents
We were somewhat surprised to see that, in addition to companies wanting to bring the site to the attention of their employees as a comprehensive on-line resource center (it’s free), many companies are already talking about having private sections for providing plan documents, etc. to their employees, and modifying the content, adding or deleting articles, etc.
We understand that brokerage firms and financial service firms, including those that are developing their own modeling tools for clients, are already approaching myStockOptions.com seeking the content side of the web site.
Internal Use. Some companies have been so impressed with the content on the web site that they will be using it to make sure that their own stock option administrators as well as HR and finance staff are up to speed and keeping abreast of developments. And, brokerage firms, in the same way, are telling their brokers that there is now a resource they should be going to that will prepare them for their client questions. Along those lines, our in-house and outside counsel readers may well want to make this site required reading (along with The Corporate Counsel, The Corporate Executive, Romeo and Dye and the NASPP) for everyone who works with option plans or advises executives and optionees.
In short, it looks like this web site is going to be a big hit not only with executives and optionees, but also their companies, their advisors and their lawyers. We would encourage our readers to visit the site (at www.mystockoptions.com) and let us know what you think, including any suggestions. As the site has developed, we have become more involved. We have a strong desire to have this site be as good as possible. It helps us all when those we serve (from the lowest level employees to top executives) are educated and alert to potential problems, pitfalls and opportunities. We see this web site as a potentially extremely helpful tool in making all of our jobs easier.