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Stock options as payment
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June 22, 2000: 10:43 a.m. ET
In a volatile market, think twice before accepting equity in lieu of cash
By Jane Applegate
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NEW YORK (CNNfn) - Dear Jane: As a public relations expert who has helped build value at a couple of Internet companies, I need help with negotiating stock options or other forms of equity. Is there a table or formula to use? Most of what I see is from an employer's point of view.
Unfortunately, the world of stock options is rather murky. Options aren't worth anything until you can exercise them and in today's volatile market, many options will be worthless when they could have been worth millions.
If you are providing real PR services for the company, you should be paid something for your time. You don't want to accept equity in lieu of payment, especially if the company is small and in a high-risk arena.
If you really like the company and respect the management, accept a few options, but consider them a bonus that may or may not be worth anything down the road.
Try to speak with other creative professionals about their experiences in the option world. Landlords, attorneys and other folks also are accepting stock instead of cash, especially in California's high-tech areas.
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