Negotiating Another Form of Compensation at Your Job
by Jonathan Dyer
When starting a new job or pushing your boss for a raise, you’ll likely go through some negotiations before settling on a salary. Obviously the goal for most people is to get that number as high as possible and ensure they’re getting paid what they’re worth. However salary isn’t the only factor in the compensation you ultimately receive from your employer. In addition to other perks like health insurance, company cars, or even student loan repayment, employers may offer you stock options which can be a very lucrative proposition.
As Business Insider recently noted, stock options can be a great way to not only make money but to also show your commitment to your company. Most stock options allow employees to purchase shares of a company at a pre-determined price during their employment. This gives you a vested interest in the business’ success and the chance to make a significant profit should the company grow.
While stock options are nothing new they have grown in popularity among start-ups looking to keep their payroll costs low. Smaller companies have also been known to be more generous with stock options as a way to attract top talent and incentivize their hard work. However, like with any stock, these rewards come with a fair amount of risk.
The biggest drawback with stock options is that they could be rendered useless should the company’s stock take a dive or the business goes bankrupt. Not only will you be out of a job if that happens but you’ll also have the sting of knowing your time investment in the company was wasted. So how can you decide if taking stock options is right for you?
BI suggests that it will depend on where you are in life. Similar to how those closer to retiring should be more conservative with investments while younger investors can be more aggressive, those without homes, spouses, or children are the best candidates for stock options. On the other hand, workers with greater obligations may prefer the stability of a steady paycheck with higher income today.
What it comes down to is that stock options aren’t for everyone. However, if you’re negotiating starting compensation or a raise, it may be worth exploring stock options as just that — an option. Just remember to think beyond straight salary and calculate your total compensation before settling on a deal.
I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.
As small business owners across the country continue to face a number of economic and other challenges American Express and Main Street America are teaming up to offer some relief. This week, the latest edition of “Backing Small Businesses” grant program was announced, with more than $2.3 million available to small business recipients. Eligible business owners can now apply for a chance to received a $5,000 grant. These funds can...
A new premium credit card that puts a heavy emphasis on health and wellness is now launching a public beta. This week, Ness announced the debut of the Ness Card, partnering with a number of top wellness brands in the process. The card is issued by The Bank of Missouri and will operate on the Mastercard network. Starting with rewards, the Ness Card will earn 5 points per dollar spent...
A startup that helps employees access their earned wages more quickly and easily has just raised some major funds of its own. This week, Rain announced that it has raised $66 million in equity. The Series A was led by QED Investors and Invus Opportunities, while WndrCo, Tribe Capital, and Dreamers VC also participated. In addition to the equity round, Rain raised an additional $50 million via debt facility, arranged...
Put simply, the value proposition of Pay with GasBuddy is that you can use a special card that's accepted at most gas stations in order to save a few cents off of every gallon of gas you buy. That sounds good — almost too good, if you think like me.
Over the past few months, I've been a bit torn. While I love saving money and keeping costs down, the convenience of grocery delivery has proven too powerful for me to resist. Now one of my favorite discount grocery stores is rolling out a better option with the introduction of Aldi Curbside Pickup. Yet, the question still remains: is this option actually worth it?
Over the past few years, the free credit score site Credit Karma has expanded into other aspects of finance. This includes offering an unclaimed funds finder as well as a free tax filing platform (which they recently sold off to Block Inc now that Intuit’s purchase of Credit Karma has been completed). Additionally, Credit Karma has rolled out a free checking account in the form of Credit Karma Money Spend ...
A few short weeks ago, I shared my review of an app called Current Rewards that allows you to earn gift cards and cash just for listening to music (although you'll need to do a bit more if you want to really earn points). As I noted in that review, I was first made aware of the app's existence thanks to an ad I saw for the Mode Phone. Well,...
First the bad news: considering all the major data breaches that have hit retailers, websites, and freaking credit bureaus alike, there’s a very strong chance your personal info has been compromised at some point. Luckily, in addition to steps you can take, such as freezing your credit reports to prevent criminals from using this data, there are a growing number of tools you can use to foil thieves in the...