Money Essentials

Maximizing your employee stock options


Employee stock options used to be reserved for the executive suite. No longer. From cash-poor Silicon Valley startups to old-line manufacturing and service firms, more and more companies are offering stock options to the rank and file as well.

The National Center for Employee Ownership (NCEO) estimates that about 9 million Americans hold stock options and that the plans account for at least several hundred billion dollars.

In 1990 there were only about 1 million workers covered by a few hundred stock option plans. There are nearly ten times that many employees participating in some 3,000 plans.

Still, management continues to receive the lion's share of stock option grants. Of companies that grant options to more than half their employees, non-management receives 45% of total options allocated, on average.

At the largest companies, this average is 29%. At biotech and computer firms, however, 55% of option grants go to non-managers.

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