A company has recently offered me a job with a very low salary and stock options and stock bonuses. Also, I can buy stock at a discount. Are these stock benefits enough to offset the low salary?

A. The benefits you mention are fairly common in the IT industry. Stock options and discount purchased shares can be a great benefit if the stock of the company goes up dramatically. Many early Microsoft employees made their fortunes this way. If the stock goes down or the company goes broke, you'll be left with some worthless stock certificates. Stock options are usually set up to incent you to stay with the company. In other words, you'll need to stay with the company a certain length of time to receive the stocks. To cite a real-world example, marchFIRST recently filed for bankruptcy, leaving many of their 10,000 employees who had options due without a dime. Many of these folks had 3 years of vested options worth thousands of dollars. Before you consider accepting options and other stock-related compensation in lieu of a proper salary, visit with your tax advisor and have an investment counselor explain option terminology, including strike price, vesting, incentive shares, etc.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish