Yeah. Same thing goes about stock options. Not just in large companies. A lot of startups are having much lower internal evaluations.
My example: I joined my previous company and got stock options priced at 4.15, and when I left the company they were worth only 2.99.
Company makes more, but it is just achross the board they are valued less right now (similiar sized companies are used as benchmarks).
So, if you join now, you can get your stock options for less. As for me? I am going to exercise only about 100 of them, just as a souvenir.
Moral of the story: If you want to be rich, start your own damn company. Few people (except google, yahoo, youtube), made really good money from being an employee.
The way these deals usually work is that anywhere from 2 to 15% is kept in escrow until 12-18 months after the sale.
I was involved in the sale of a company last year, and was told specifically by our lawyer not to count on seeing all of the escrowed funds. In his experience, acquirers almost always find a way not to pay some or all of this money.
It's possible he was being overly cautious (under-promise, over-deliver), but I'm heeding his warning to be on the safe side. What sucks is from a tax standpoint I'm paying estimated taxes this year on money I may or may not see come December.
At the Federal level, long-term capital gains tax, since it's the profit from selling shares (not options) in the company which I owned for more than a year. At the state level, California treats everything as regular income.
It's considered an "installment sale", meaning I can defer paying taxes on the escrowed amount until the tax year in which I receive payment. There are some limits on this that I don't fully understand, which I paid my accountant to figure out and justify to the IRS if I get audited.
My example: I joined my previous company and got stock options priced at 4.15, and when I left the company they were worth only 2.99. Company makes more, but it is just achross the board they are valued less right now (similiar sized companies are used as benchmarks).
So, if you join now, you can get your stock options for less. As for me? I am going to exercise only about 100 of them, just as a souvenir.
Moral of the story: If you want to be rich, start your own damn company. Few people (except google, yahoo, youtube), made really good money from being an employee.