Ask Terry Questions stock options as a benefit

stock options as a benefit

By Terry Savage on December 04, 2019 | Wild Card

Can you explain the potential value of stock options when working for a start-up? I have to be employed for four years to qualify. What if they are acquired before the four years…or if I left this position in five years?

Terry Says

OK, it all depends on the terms of the option –so you need to ask these questions of the company. Each sets its own terms. It may mean that you get the options grant now — but are not “vested” until you have worked there for four years. Perhaps you are vested at 25% per year. The terms dictate what you get if you leave before you are fully vested –but likely nothing. If they are acquired it will depends on the terms of that deal as to whether your options are worth anything. Typically, they must treat employees the same as the owners, but the owners own STOCK not options!

So you can consider this a “lottery ticket’ on the future of the company –and only if you are around long enough to make that future worthwhile! Do check on the specifics of this option grant. The owners create the grant to “motivate” you to stick with them, but the devil is truly in the details!



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