Consider Your Options: Get the Most from Your Equity Compensation

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Just about everyone has heard a story about a corporate secretary or twentysomething Microsoft employee who retired early--as a millionaire--not because of winning the lottery, but because she exercised the stock options granted by her company. The fact is, many, many working Americans have access to stock and option plans in the workplace, and although it is a bit of a stretch to assume that such plans are a guaranteed ticket to riches, equity compensation can be an intelligent means for building wealth. The trick, according to Kaye A. Thomas, is understanding and handling it properly, and this is where Consider Your Options comes in.

Thomas, a veteran tax lawyer, has written a straightforward, no-nonsense, plain-language guide to getting the maximum value from your equity compensation. He begins with the basics--what stock is and how to buy and sell it, stock grants and purchases, options in general--and proceeds with clear examinations of nonqualified and incentive stock options. From there, he leads the reader through the ins and outs of exercising stock options, vesting, and employee stock-purchase plans, with an emphasis on tax implications and financial planning (an entire section of the book, for example, deals with the Alternative Minimum Tax).

"There are certain things about stock, options, and taxes that are almost never explained because every idiot knows them," Thomas writes. "Unfortunately, there are many normal, intelligent, educated adults who don't know these things--because hardly anyone ever bothers to explain them." Now that Thomas has bothered, novices and experts alike can avoid the common mistakes and poor planning that jeopardize the highest return from these benefits. --Svenja Soldovieri

Book Description

Consider Your Options is the first book to offer plain language guidance on all the popular forms of equity compensation: stock grants, nonqualified options, incentive stock options and employee stock purchase plans. It tells how to avoid mistakes that can result in paying too much tax or otherwise failing to get the maximum investment return from these benefits. The book assumes no knowledge, explaining all the basic terminology and concepts from the ground up. Yet it also includes intermediate and advanced planning techniques, and information about cutting edge developments like reload options and the "early exercise" option plans that are popular with companies preparing to go public. You'll find a complete description of the section 83b election and tips for when it provides the greatest benefit.

In addition to complete coverage of the main topics, Consider Your Options includes guidance in related areas, such as stock valuation, estimated tax payments, and the dreaded alternative minimum tax (AMT). It's loaded with examples and tips, and tells where you can go for additional information. Read this book to get the most from your equity compensation.

Customer Reviews:

Mandatory Options Reading!.......2005-10-20

Barring an extensive endeavor to compile the various option programs offered by industry on you own, Thomas' "Consider Your Options" is an extremely helpful text for both individuals new to the options sphere as well as experienced program administrators to pick up on the nuances of the various qualified and unqualified differences. Definitely a must-have for either executives or financial advisors who work with executives to use as a tool to help establish a strategy to protect and enhance their wealth. A solid addition to your desk reference library. 4 Stars.

Covers the basics, but not strategy or advice.......2003-12-30

This book is good in that it covers all the basic mechanics of stock options -- Incentive and Non-Qualified, and ESPP plans. However, this basic information can easily be found on the web or from your employer.

What is sadly lacking from this book is advice on strategy on how to manage options, e.g., ideas on when to exercise and sell. Because of this, the book is quite disappointing to me and not very useful.

If you have any stock options, GET THIS BOOK!.......2002-07-12

This is the perfect book for anyone who has any stock options or who can participate in their company's Employee Stock Purchase Plan (ESPP). It starts very simply, and in a series of short, but complete chapters, covers the spectrum of stock ownership, vesting, ISOs vs. NQOs, the effect of AMT, and much more.

Did you know that stock purchased in an ESPP is treated by the IRS in almost the same way that an ISO is? That there is usually no long-term advantage to buying and holding Non-qualified options? That you only have 30 days to file your 83b exclusion? (If you don't know what an 83b exclusion is, you need this book).

The book does its best to explain Alternative Minimum Tax (AMT), and althought this chapter fried my brain, its because of the complexities of the AMT (simplify it IRS!), not because of the book.

A must have for people with equity in their company..........2002-07-09

An excellent resource for anyone seeking to understand and be involved in planning strategies to maximize the after-tax value of your stock compensation. Covers restricted stock grants, options (ISOs & NQSOs), employee stock purchase programs (ESPP). Various areas of tax planning are covered in detail: strategies to minimize AMT, effects of early exercise thru 83b election, gifting or donating options/stock, etc.

The author describes topics in a matter that is both thorough and easy to read. The book is organized into sections devoted to specific topics making it easy to skip or skim sections that may not pertain to your particular situation (e.g. there are separate sections on NQSOs and ISOs). Additionally, the author makes good use of examples throughout the book to illustrate complex rules. This latest edition (Apr 2002) includes updated information regarding changes to tax laws as well as explanations of pitfalls that many optionees have encountered recently (e.g. ISO "wash" sales).

This book is a must have to anyone who receives a portion of their compensation in the form of equity, whether it be stock grants, options, ESPP, or any combination of these. The book is both an informative read as well as a handy resource to keep on your bookshelf. After reading this book, most people will have all or nearly all the tools & info they need to develop their own strategies for managing their stock should they so desire. For those seeking professional advice, this book serves as a great overview so that you can understand the process and ask all the right questions. I only wish I had found this book sooner :)

Best book on Options out of the four I got.......2002-01-22

Structuring a deal with two companies to work for options - and needed some advice. Bought every book that I could get my hands on 1. Consider Your Options Kaye A. Thomas (Harvard Lawyer - (male) ) GREAT! Excellent advise parceled out with just the right amount of depth - but gets to the meaty stuff. Really told me not only what I wanted to know - but other things that I didn't know I needed to know. Easy to read - learned - good stuff.
2. Better Than Money David E. Gumpert - Not as learned a book - but easy reading and focused on the employee side. Addressed several issues about negotiation of options in a hire situation
3. Pay Me In Stock Options C.E. Curtis - Hard Back - but cheap. I would not recommend - a hard read, not organized
4. Stock Options for Dummies Alan R. Simon The basics - and well done - but didn't address several of the issues that I wanted to know....How to get more ....and the psychology aspect of obtaining them.

Better Than Money: Build Your Fortune Using Stock Options and Other Equity Incentives--in Up and Down Markets

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Must-read for job changers
Essential Career Book

Better Than Money: Build Your Fortune Using Stock Options and Other Equity Incentives--in Up and Down Markets
David E. Gumpert
Manufacturer: Lauson Publishing
ProductGroup: Book
Binding: Paperback

General | Business & Investing | Subjects | Books

General | Investing | Business & Investing | Subjects | Books

Introduction | Investing | Business & Investing | Subjects | Books

Options | Investing | Business & Investing | Subjects | Books

Management | Management & Leadership | Business & Investing | Subjects | Books

General | Personal Finance | Business & Investing | Subjects | Books
ASIN: 0970118120

Book Description

Thanks to stock options, an individual's decision to take one job over another can mean the difference between hundreds of thousands, or even millions of dollars in just a few years. Better Than Money cuts through the technical lingo to put employees in the driver's seat to spot winning situations and negotiate the best stock option package. Readers learn the four best times in a company's life to obtain stock options, how to counter the five "tricks" employers use to reduce option grants, the ten most important questions to ask before accepting any option package, and seven steps to negotiate the best option deal. Also included is a sample stock option offer letter, a glossary of terms, and a list of Web sites to help in evaluating a job offer that includes stock options.

Customer Reviews:

Must-read for job changers.......2000-06-21

This book was great! A headhunter caught me off gaurd with a great opportunity, but I had to make a decision faster than I was comfortable with. I got myself smart in about 2 days, and was able to negotiate a much better compensation package. I'd recommend it to anyone in a negotiation-situation.

Essential Career Book.......2000-06-16

Stock options have always been a big mystery to me. This book helped me understand what employers are talking about with stock options. I found tons of "insider" tips and real-life examples that I will put to use right away. In particular, I found the "secrets" of negotiating for stock options-- especially the tricks companies use to reduce stock options grants--to be especially eye-opening. I also learned how to think of myself as an investor and not just an employee--something I had never done before.

Book Description

Nearly 10 million Americans receive stock options, up from 1 million a decade ago. At most of today's start-up companies, as well as at many large ones such as Starbucks Corp., Coke, and Wal-Mart Stores, Inc., stock options are the "real money" being put on the table for valued employees. More companies are following the trend towards employee stock options, and individuals who know how to take advantage of such incentives can become rich. Millions of workers now face compensation decisions that used to be presented exclusively to executive insiders. Tom Taulli, who writes a semi-monthly column on stock options for CBS MarketWatch, has written a practical, readable how-to book for the expanding ranks of employees at companies that award stock options. Taulli explains the basics of stock options, including vesting, exercising, and taxes. He skillfully guides readers through the complex language and logic of incentive stock options, nonqualified stock options, contract terms, and securities laws. Taulli shows readers how to negotiate for the best contract and what to do once the options are in place. He provides guidance on using hedging strategies, reducing estate taxes, and getting the right professional advice. He also explains researching stock options, finding out what "developmental stage" a company is in, and recognizing the pitfalls of stock options, such as insider trading and Rule 144. Tom Taulli has successfully negotiated stock option deals for himself, has advised others how to do the same, and is closely connected with the network of fast-growing companies for which option compensation is now the coin of the realm.

Smart advice on:
* Different types of stock options, including warrants
* Negotiating the best terms
* Tax considerations
* Strategies for diversification
* Web resources and other useful tools
* Concerns for estate planning and divorce
* Finding the best advisers
* Who's who inside the top law firms

Customer Reviews:

Employee Stock Options the Easy Way.......2001-08-28

I'm a programmer based in Silicon Valley and have received stock options over the years. No question, there is a lot of misinformation on the subject. Then again, the subject is extremely complex! However, when reading Taulli's book, things became much clearer. The sections on AMT were especially done well. If you want to understand your stock options, Taulli's book is a great choice.

Stock Options are Understandable for the First Time.......2001-05-31

Congradulations, Tom. Finally, someone has written a book that is understandable and readable for the financially saavy and not so saavy tech employee... This book contains information that is essential for (i) the employee who is interested in knowing the good and less than good about stock options and (ii) the executive and board who needs to correctly incentivize the employee base. Tom's book outlines the types of options available, how options work, and their tax and securities law treatments. The section on negotiation is particularly interesting and contains information not often available in a book directed at those of us who don't care to read a legal treatise. This book is well worth the read. Good luck and may your stock options be everything you hope them to be.

Good Guidance.......2001-05-06

I wish I would have read this book before I exercised my options, I would have paid alot less to uncle sam. If you want to make sure you get the most money for your options, I'd get a copy of this book. The tax implications can get complicated and Tom lends clear guidance and strategies.

Got My Share.......2001-05-06

This book tremendously helped me negotiate a good option plan for a private company I recently went to work for. I would have taken the company's original offer and would have overlooked important terms in my plan and if I did not read this book. Anyone who is offered an option plan must read this book. I can not stress it enough. I learned they are as negotiable as my salary and benefits. It scares me to think of what I would have left on the table.

Everything You Need to Know About Stock Options.......2001-05-06

I have been a fan of Tom Taulli's writing for some time now. I highly recommend this book to any financial advisor, broker, or person who has stock options. He makes the tax and financial planning implications of stock options easy to understand. In addition, the book offers many useful tips and pitfalls to avoid from happening.

Average customer rating:

Ken Downer, CPA President of IHS Financial Planning, Inc.
Very helpful
This book is excellent!
Bad Book + Website = $$$$
Self-Promoting Garbage

Your Employee Stock Options
Alan B. Ungar , and Mark T. Sakanashi
Manufacturer: HarperBusiness
ProductGroup: Book
Binding: Hardcover

General | Popular Economics | Business & Investing | Subjects | Books

General | Business & Investing | Subjects | Books

Introduction | Investing | Business & Investing | Subjects | Books

Options | Investing | Business & Investing | Subjects | Books

Stocks | Investing | Business & Investing | Subjects | Books

General | Personal Finance | Business & Investing | Subjects | Books
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ASIN: 006662097X
Release Date: 2001-07-03

Book Description

Explore Your Options

Stock options are one of the fastest-growing trends in employee compensation and are no longer reserved for just high-level executives. Options have become a common part of compensation for millions of Americans in new as well as old economy companies.

But many option holders don't understand what they have, are not aware of option risks, and are at a loss to know when or whether to exercise the options. Exercising too soon could mean missing out on potential profit. Hang on too long and you just might lose everything.

Your Employee Stock Options is the definitive guide to understanding and getting the most out of this increasingly popular form of compensation. Authors Alan B. Ungar and Mark T. Sakanashi, both Certified Financial Planners, share their methods for determining risk and acting accordingly. Stock options, they say, can be used both to secure financial well-being and to achieve long-term goals. Their guidance shows how you ran use options to:

build a foundation for financial freedom using the authors' Critical Capital Strategy, which shows you how to immediately establish your own financial security with a minimum of risk

decide when to exercise your options, estimating the most advantageous time to sell

reduce the tax bite and keep more of what you make

The book is divided into two easy-to-understand sections. The first covers fundamental concepts that all option holders need to know: option types, tax ramifications, vesting, and more. The second part introduces a simple five-step procedure covering the decision-making process, helping you build a long-term plan while meeting short-term needs.The site offers analytical and planning tools and downloads of the do-it-yourself worksheets included in the book, all free of charge.

You need this book if you:

have been given options and aren't sure what to do with them

are changing jobs, and have options from your old employer and want to negotiate options with your new employer

are self-employed and are offered options in lieu of payment from a client

are a financial planner or investment advisor

are a corporate manager who must make decisions or answer employees' questions about options

More than 12 million employees receive stock options. If you're one of them, you can't afford to do without this comprehensive and interactive guide.

Customer Reviews:

Ken Downer, CPA President of IHS Financial Planning, Inc........2003-05-04

I am re-reading "Your Employee Stock Options" by Alan Ungar and Mark Sakanashi to sharpen my stock option knowledge.

This book is not only a must-read for anyone who owns options, but it is invaluable to me in my financial planning practice. The concept of "Critical Capital" is the most common sense way to look at the timing of cashing in options that I have seen. My clients benefit by having a rational way to look at how options can best be used to reach their financial goals.

Throw in the tools available on the website, and you have a complete resource for guiding yourself or your clients through the complicated maze of stock options. I highly recommend this valuable book.

Very helpful.......2002-01-09

I found this book very helpful in deciding how to manage my option portfolio. It helped me to think about risk assessment and the assessment of future potential of my options.

I really like the practical and useful information in the book. Which options should I exercise first and why? Should I sell or hold...how many and for how long?

By using the tip from the book regarding the AMT "sweet spot" I found I could exercise a number of ISOs in 2001 without incurring AMT in excess of my normal tax liability. I also used the tip on stock exchanges.

Very helpful. Well worth the price.

This book is excellent!.......2002-01-08

I am a Certified Financial Planner with over 30 years experience. My staff and I deeply appreciate the authors' concept of Critical Capital as a tool for helping clients determine when to exercise and when to sell their stock options. Their companion web-site reinforces the points they make and is easy to use. The chapters on why to hold and when to sell options is a must read for anyone who owns options or anyone who advises clients with options.

Bad Book + Website = $$$$.......2001-10-31

After reading this book, I'm perplexed. A few "so-called" financial advisors recommend it highly, yet I found it rather weak. I also work in finance for a living and have done so for much of my life. As for the reader who says if financial people all knew so much, they'd all be rich, he's right, many of them are. But not because of following the advice in this book. Probably because a few of them have you buy a poor written book, link you to a dubious website, and cash in membership fees...
It's so bad, it would seem that the authors are either writing their own reviews or having their friends write them. I found myself mortified to have bought this book, save your money and search the web for real-world advice.

Self-Promoting Garbage.......2001-10-27

What else can I say other than this book was a total waste of time and money. I find it incredible that anyone with even mediocre intelligence would rate it more than one, or two stars. Some of the reviews on here are no doubt written by the authors or their friends.
In all my years working in finance and accounting, and all the books and studies I've read, I must say I have never read such a clearly self-promoting tripe as this. After viewing their Website, it turned my stomach.

409A: are your deferred compensation plans in compliance?(The Legal Corner): An article from: Los Angeles Business Journal

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409A: are your deferred compensation plans in compliance?(The Legal Corner): An article from: Los Angeles Business Journal
Mike Fernhoff
Manufacturer: Thomson Gale
ProductGroup: Book
Binding: Digital

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Book Description

This digital document is an article from Los Angeles Business Journal, published by Thomson Gale on June 11, 2007. The length of the article is 1020 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

Citation Details
Title: 409A: are your deferred compensation plans in compliance?(The Legal Corner)
Author: Mike Fernhoff
Publication: Los Angeles Business Journal (Magazine/Journal)
Date: June 11, 2007
Publisher: Thomson Gale
Volume: 29 Issue: 24 Page: 42(1)

Distributed by Thomson Gale

Are you considering a change in your accounting for employee stock options?: An article from: Directorship

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Are you considering a change in your accounting for employee stock options?: An article from: Directorship

Manufacturer: Directorship, Inc.
ProductGroup: Book
Binding: Digital
ASIN: B000BE6CZ2
Release Date: 2005-09-13

Do your employees understand stock options?(goals communication)(Statistical Data Included): An article from: Strategic Finance

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Do your employees understand stock options?(goals communication)(Statistical Data Included): An article from: Strategic Finance
Maureen P. Kerrigan
Manufacturer: Institute of Management Accountants
ProductGroup: Book
Binding: Digital

General | Business & Investing | Subjects | Books

Book Description

This digital document is an article from Strategic Finance, published by Institute of Management Accountants on May 1, 2001. The length of the article is 2006 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

Citation Details
Title: Do your employees understand stock options?(goals communication)(Statistical Data Included)
Author: Maureen P. Kerrigan
Publication: Strategic Finance (Refereed)
Date: May 1, 2001
Publisher: Institute of Management Accountants
Volume: 82 Issue: 11 Page: 52

Article Type: Statistical Data Included

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Employee stock ownership plans: are they right for your company?: An article from: Modern Casting

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Employee stock ownership plans: are they right for your company?: An article from: Modern Casting
Corey Rosen
Manufacturer: American Foundrymen's Society, Inc.
ProductGroup: Book
Binding: Digital

General | Business & Investing | Subjects | Books

Book Description

This digital document is an article from Modern Casting, published by American Foundrymen's Society, Inc. on December 1, 1993. The length of the article is 851 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

Citation Details
Title: Employee stock ownership plans: are they right for your company?
Author: Corey Rosen
Publication: Modern Casting (Magazine/Journal)
Date: December 1, 1993
Publisher: American Foundrymen's Society, Inc.
Volume: v83 Issue: n12 Page: p31(1)

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