How Much Stock Should You Ask For?
How Much Stock Should You Ask For? The Answer Might Surprise You
When the time comes to negotiate your compensation package, you might be asked about the number of stock options you would like to receive. While it may not seem all that important, this question can actually have a huge impact on your financial future. To make sure that you get what you’re worth, here’s some information on how many stock options to ask for when negotiating your compensation package.
What is a reasonable amount of stock to ask for?
Stock is an integral part of any company and can be a great way to align personal interests with business objectives. Some people may say that you should always ask for the maximum amount of shares possible, while others will tell you to go as low as possible. In reality, it’s best to try and find the right balance between too many and too few. There is no one-size-fits-all answer when it comes to how many stock options you should ask for, but there are a few guidelines that might help:
1) Get your foot in the door – If you’re just starting out and you want a chance at any available position, give yourself an advantage by offering up some stock.
What if the company can’t afford to give you stock?
This is a common question when someone is joining a company. Asking for too many options might be an insult to the company or make them feel like you are taking advantage of their generosity. On the other hand, asking for too few options will not allow you to reap all the benefits of your hard work.
The solution to this dilemma is easy: ask for what seems fair and reasonable at the time. If it turns out that there is not enough stock to go around, then talk with your co-workers about how they would like things to be handled.
What if the company doesn’t have any stock?
Startups often do not have any stock to offer at the time of hiring, but that doesn’t mean you should not ask for anything. There are many different types of equity compensation you can request and they all come with a different amount of risk.
If you are looking for something with less risk than stock, there are three basic types: cash bonuses, restricted stock units (RSUs), and deferred compensation. Cash bonuses make up for salary differences at the time of hire and there is no risk to the employer if it doesn’t work out in the end.
What if you’re early in your career?
How many stock options should you ask for when negotiating an offer? It’s a tough question. After all, how do you know what to do when there is no right answer. However, according to research done by the Society of Human Resource Management, the answer to this question might surprise you. First off, in their survey of more than 1,200 HR professionals and hiring managers from a variety of industries and company sizes, they found that only 25% have ever received a request for stock options from an employee. What does this tell us about current trends in stock option negotiation?
