Word: cashes
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Millions of stock options granted to rank-and-file employees in the late 1990s are set to expire worthless in the next few years--a sobering reminder that when it comes to your compensation, there is no substitute for cash, and when it comes to your long-term financial security, there are no can't-miss lottery tickets...
...helps quantify the dashed hopes of countless working stiffs who had been banking on options to help with goals like paying for the kids' college tuition and their own early retirement. In some cases, their options came in lieu of tangible rewards like a decent raise, profit-sharing or cash...
Here's the problem: stock options typically are granted on an annual basis, and with each set, you must use them or lose them within 10 years. They have cash-out value only when the stock has risen above the "strike price" (usually the price on the day of the grant) and after a typical vesting period of three or four years...
...early and mid-'90s made them wealthy when the markets caught fire later that decade. In part to ward off criticism and in part because options were seen as free money then, many CEOs shared the bounty with the rank and file. This was most often true in cash-strapped start-ups in Silicon Valley. But the equity-for-all ethos spread. Fewer than a million people held options at the start of the '90s, but the number swelled to 12 million in 2001. It stands at 9 million, and shrinking, today...
...broad-based stock-ownership plans (ESOPs) are still popular and well funded. If you're changing jobs, keep that in mind. At public companies, meanwhile, you can still command options or restricted shares if you are a top performer. "But most people should focus on their benefits, like a cash bonus, a raise and the 401(k) match," says David Broman, CEO of pay consultant Syzygy. "Companies are in the driver's seat...