Poll: How much money have stock options brought you?
31 comments
Ultimately the only question that matters is how much money was made. Dwelling on fantasies is immaterial (until you can sell or find a way to lock in the price, the market price has no bearing on your actual value).
In your example, you can say whatever you want about how it was worth more than you actually netted, but at the end of the day all that matters is the fact that you realized 16K
In your example, you can say whatever you want about how it was worth more than you actually netted, but at the end of the day all that matters is the fact that you realized 16K
Looking at the maximum value normalizes for someone's risk profile and financial luck/common sense. I agree with you that for your personal finances all that matters is how much money you got or can get, but normalizing for these factors is useful in a poll.
I don't like to think about this, because my first tranche of AAPL options were valued at ... $42.
I suspect your salary over the years netted you a heck of a lot more than your stock options. I did 3 years of contracting in London 15 years ago (after barely out of school), invested the money, and ended up with about $150k due to a favourable FX rate at the time.
These days it seems that every man and his dog is earning $150k+ if they're a half-decent developer in silicon valley, so I guess the stock options don't really matter. (I earn a lot less than that myself now, because I run my own mildly-profitable business).
It makes you wonder whether stock options are really just like throwing a dog a bone. The only people who really make any money are the investors and founders. At post-IPO places like facebook and google the stock bonus is really just an add-on to your salary. When I look up 'senior software engineer' salaries at google, you typically earn around $250k including stock bonus, so if you're looking for money I guess that's where you should be :)
These days it seems that every man and his dog is earning $150k+ if they're a half-decent developer in silicon valley, so I guess the stock options don't really matter. (I earn a lot less than that myself now, because I run my own mildly-profitable business).
It makes you wonder whether stock options are really just like throwing a dog a bone. The only people who really make any money are the investors and founders. At post-IPO places like facebook and google the stock bonus is really just an add-on to your salary. When I look up 'senior software engineer' salaries at google, you typically earn around $250k including stock bonus, so if you're looking for money I guess that's where you should be :)
Except that it's not a choice of 'salary' or 'stock options' it is 'salary' or 'salary + stock options'. I can say pretty confidently that I've earned more with salary + options than I would have as a consultant with just salary.
To date I have made at least as much money with Sun options as I made in salary (I worked there 10 years). At some level, some of my current savings can be traced back to those options so they are in principle (pun intended :-) still earning me money.
To date I have made at least as much money with Sun options as I made in salary (I worked there 10 years). At some level, some of my current savings can be traced back to those options so they are in principle (pun intended :-) still earning me money.
Ah ok, I thought the $16k was the entire amount, but I see you said 'left over' :)
Still, for every engineer who lucks out when their startup turns into the next Apple, Sun, Facebook or Google, there are a lot more whose stock options end up either worthless or close to it. Looking at upvotes on the parent article, it seems like $0 outnumbers any other option by almost a factor of 4.
Still, for every engineer who lucks out when their startup turns into the next Apple, Sun, Facebook or Google, there are a lot more whose stock options end up either worthless or close to it. Looking at upvotes on the parent article, it seems like $0 outnumbers any other option by almost a factor of 4.
If you've had more than one job your ability to select multiple options goes up :-). There is another post here which mentions they can have negative value (which is to say you exercised them but they were never worth anything) and that is important to.
If you follow the strategy that you only exercise and sell when they are worth money and you can sell, then options are always 'additive' to your salary. If you take options in lieu of salary then you're taking a bigger risk than someone who has both. The philosophy a number of people I know use with startups is enough salary to get by and save a bit, and options as an upside kicker.
If you follow the strategy that you only exercise and sell when they are worth money and you can sell, then options are always 'additive' to your salary. If you take options in lieu of salary then you're taking a bigger risk than someone who has both. The philosophy a number of people I know use with startups is enough salary to get by and save a bit, and options as an upside kicker.
You should add options for negative quantities too. You can pay money to exercise options and never get that money back.
Indeed. As well as perhaps an poll selection for options you've exercised but do not know yet what you'll get for them (company still running but haven't had opportunity to sell shares).
You can also get really nailed on AMT depending upon timing, even in situations where the stock ends up underwater and worthless before you can be rid of it.
More than twelve users have sold stock options for more than $100M? Hello Larry, Sergey, Eric, and Tim! I would have suspected you were too busy to read HN.
Every time polls happen here people openly vote for every option to "show how broken the HN poll system is" and to "prove that PG should make it so only one option can be selected", every now and again people gloat about doing it. It's really really lame.
If you had a (very) successful company exit where you made more than $100M, you would stop reading HN?
Pretty sure I would double up.
If they've netted that much, that means they've sold. As such, there's a good chance they've retired, or at least only work on their own side projects now. Not everyone sells a company and then starts another one.
Also, rich people have access to the same internet. Is there an "interesting shit about programming but only for rich people site" that I don't know about?
Also, rich people have access to the same internet. Is there an "interesting shit about programming but only for rich people site" that I don't know about?
The number of people who have sold more than $100M in options (as opposed to founders' stock) is likely quite small, no? The poll is now up to 38.
I wonder if it is true, or if it is someone just clicking on it for shits and giggles. I've often wondered who exactly reads HN.
HN is the best tech news aggregator on the net. Where do you think Larry, Sergey, Eric, and Tim get their news from?
There are probably a lot more household tech names on HN than you'd initially expect.
There are probably a lot more household tech names on HN than you'd initially expect.
Larry, Sergey, Eric, and Tim get their news from private research departments in their own firms. They may occasionally browse HN for downtime, but I really doubt they have time to read through it in depth. Hell, I'm just a lowly engineer and I rarely have time these days to read through it in depth.
Now, many of the employees of these companies frequently browse HN, and that can sometimes filter upwards if there're relevant or interesting articles there. In general executives rely on people specifically paid to sort through information for them, though. (Though I've heard Larry, Sergey, and many Google executives are big Google Reader users...I guess they'll have to find a new RSS reader now.)
Now, many of the employees of these companies frequently browse HN, and that can sometimes filter upwards if there're relevant or interesting articles there. In general executives rely on people specifically paid to sort through information for them, though. (Though I've heard Larry, Sergey, and many Google executives are big Google Reader users...I guess they'll have to find a new RSS reader now.)
I don't know Larry or Sergey, and I'm not a big fanboi of theirs, but I do know some very wealthy, successful, and powerful people.
I can assure you - very few tech executives have staff members and assistants filter public information for them.
Yes, you want your internal folks to do executive summaries of internal plans/summaries/designs, etc.
And yes, they'll pay $5k/year (or more) to buy analyst reports that summarize things (e.g. bad example Cook Report on the Internet [that'll date me], or Gartner/etc reports).
But Jim Crowe at Level3 read RFCs, and I believe that people like Larry Ellison, Sergey, Zuckerberg, Marc Andresson, Marissa Meyer are reading the real source stuff. They're just doing it in a discrete manner and not posting.
Executives that ONLY rely on the people that report to them are relics of an age of bankers and dinosaurs.
Real tech leaders remain technical and close to the source.
I can assure you - very few tech executives have staff members and assistants filter public information for them.
Yes, you want your internal folks to do executive summaries of internal plans/summaries/designs, etc.
And yes, they'll pay $5k/year (or more) to buy analyst reports that summarize things (e.g. bad example Cook Report on the Internet [that'll date me], or Gartner/etc reports).
But Jim Crowe at Level3 read RFCs, and I believe that people like Larry Ellison, Sergey, Zuckerberg, Marc Andresson, Marissa Meyer are reading the real source stuff. They're just doing it in a discrete manner and not posting.
Executives that ONLY rely on the people that report to them are relics of an age of bankers and dinosaurs.
Real tech leaders remain technical and close to the source.
I think someone's skewing the poll.
Personal wealth follows a powerlaw distribution, and there's good reason to believe that income from stock options is somewhat similar. If you look at the numbers above they make reasonably sense except for the "in the hundreds of millions" which is far too high compared to the others. The "in the hundreds" and "in the thousands" should be higher, but I'd wager that that can be explained by people not getting stock options in the hundred or thousand dollar range. The paper work alone would cost more. It's expected that there are a few, since a stock can tank, so stock options initially worth millions can turn into thousands when cashed in.
Personal wealth follows a powerlaw distribution, and there's good reason to believe that income from stock options is somewhat similar. If you look at the numbers above they make reasonably sense except for the "in the hundreds of millions" which is far too high compared to the others. The "in the hundreds" and "in the thousands" should be higher, but I'd wager that that can be explained by people not getting stock options in the hundred or thousand dollar range. The paper work alone would cost more. It's expected that there are a few, since a stock can tank, so stock options initially worth millions can turn into thousands when cashed in.
Actually, wealth follows an exponential distribution for the lower 95% of individuals (by wealth) [1]. However, yes, it does follow a power law for the 5% richest.
[1] http://arxiv.org/abs/cond-mat/0103544
[1] http://arxiv.org/abs/cond-mat/0103544
I don't think it necessarily has to be evenly distributed. If you think about options people probably either A) Made a good amount of money or B) Made none at all. Most companies issuing options are likely venture backed and not going to settle for a marginal gain. Thoughts?
I think it is, based on the fact that (as I mentioned in the GP) wealth follows a powerlaw distribution. I don't see why options wouldn't follow this trend, particularly because market cap of companies in an economy also follows a powerlaw. These are the two factors involved in options.
Maybe there's some old school Microsoft types, etc., because other than that I'm skeptical that only 8 people have made 'tens of millions', but 35 have made 'hundreds of millions or more' (or that 35 have made that at all)...
So I think you mean stock option grants... because otherwise you should have an equal number of choices for negative values.
I think the meta-meta question here is regarding the value of stock options vs immediate compensation (salary + benefits). So many CEOs treat options like they will definitely be of large worth to a person- but for the average employee they'll never see anything from them.
Yup. It's also really kinda entertaining how offended founders get when you ask for more money instead when you're employee #53 and they offer a number of options but refuse to disclose what % of the pool that is.
In a small company, if I can't see the cap table- then I don't want to talk about shares. No investor would touch a deal if they didn't have access to it, and I'm investing my time.
I've never seen a dime from equity from a non-publicly traded company.
You might want to be more precise -- founder's stock, RSUs, private company/incentive options/nsos, and public traded options are all different and the same.
I've never actually received private company options; it's always been founders shares, even in a post-A company.
I've made maybe 600% on my money trading options (mainly AAPL and some non-tech companies; lost on TSLA but made money on TSLA stock), which is probably not what you meant.
I've never actually received private company options; it's always been founders shares, even in a post-A company.
I've made maybe 600% on my money trading options (mainly AAPL and some non-tech companies; lost on TSLA but made money on TSLA stock), which is probably not what you meant.
There should be an additional choice for people who have options but aren't able to cash them out yet.
That would offer a view into the percentage of people who stay at a startup long enough to exercise their options.
That would offer a view into the percentage of people who stay at a startup long enough to exercise their options.
There is an option for you. $0. You haven't made any money yet from options.
Yes, but there's a difference between your options being worth nothing and the value of your options being unknown.
There's also a difference between the value of your options being unknown and the value of your options being known but you not being able to exercise them for whatever reason.
You may not care about that distinction, but I'd be interested to know what camp those "$0 :(" people are in.
You may not care about that distinction, but I'd be interested to know what camp those "$0 :(" people are in.
$0 :)
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I made about $2,500 for 2000 shares once when my company was bought out and was promised $50,000 more if the company hit certain milesones. We did not hit said milestones.
Hm, I suspect you will get a lot of "$0" answers from folks who have only been out of school since 2008, and much higher answers from folks who were in the Valley pre-2001.
Depends on what you mean by stock options. I imagine quite a few people here trade single-stock (e.g. AAPL https://www.google.com/finance/option_chain?q=NASDAQ%3AAAPL) options.
They mean ESOs or RSUs
RSU's are different that stock options, no? I answered zero as I have never had anything come from options, while RSUs have been very nice.
yes, they are. What I meant to get it is that the OP is probably talking about equity-based employment benefit programs, not trading options in the open market.
Where's the negative ($<0) option? I paid for some options and they were worthless.
Same here. Exercised at $3, never sold. They went down to $0.02 and more recently back up to $0.40. Could have made a lot had I bought at $0.02. I regularly tell myself to just sell the damn things so I can stop looking at the ticker.
I have only had above water options at one of three start-ups I worked for.
Pre-IPO stock options should be viewed as lottery tickets unless one is a founder. Still, they motivated me.
Pre-IPO stock options should be viewed as lottery tickets unless one is a founder. Still, they motivated me.
I have a check for 1,000 shares, grand total $14.99 :) issued to me on January 2002. So yeah, 1.4 cents a share.
I still have the check somewhere, I never cashed it, I've always been meaning to frame it.
I still have the check somewhere, I never cashed it, I've always been meaning to frame it.
Sad thing is that if I had sold all of mine on the last day I could exercise them, I would be in a different category.
But what are you going to do, that's super risky. No regrets.
But what are you going to do, that's super risky. No regrets.
Selling the stocks is the one-time operation, right? So you get paid once...
Is there any other scenario, when you get % of revenue constantly, e.g. on a monthly basis for the rest of your life? i.e. even if you leave the company (maybe after some vesting period).
Here, I say "revenue", because in case of "profit" the company can reinvest it, leaving you with nothing.
EDIT: So basically, is there a way to transform your employment into a passive income?
Is there any other scenario, when you get % of revenue constantly, e.g. on a monthly basis for the rest of your life? i.e. even if you leave the company (maybe after some vesting period).
Here, I say "revenue", because in case of "profit" the company can reinvest it, leaving you with nothing.
EDIT: So basically, is there a way to transform your employment into a passive income?
Stock dividends come to mind. Not sure how common that is in the industry, though.
My stock options are reportedly worth $230 but I'd hate to think how much I would have to pay to get the money into the UK, probably not worth it.
Though my answer should be prefaced with having started at Microsoft in the 90s. Options I've received since then have returned goose eggs.
$19 and some change. That's it. It's also why stock percentage is pretty meaningless to me anymore. Give me cash, or give me bitcoin.
Over the years there have been several people in here who turned down options for, what would become, major players. iirc there was someone who turned down stocks with MS that would currently be worth upwards of $320m.
Sometimes it's difficult to get out of the endless loop of 'if only...'
Sometimes it's difficult to get out of the endless loop of 'if only...'
Ha, ha, ha, stock options. Heh.
It depends on whether you're asking about sold options and actual cash or what unsold options are worth on paper.
I imagine the two amounts are significantly different for many people.
I imagine the two amounts are significantly different for many people.
I guess you're asking for a total, which would be tens of thousands. However that's comprised of one success and a lot of companies returning $0.
stock call options? where are the negative options?
I made some money speculating with options in the public stock market, does that count?
The ones I got at my company have so far netting nothing yet :)
The ones I got at my company have so far netting nothing yet :)
My answer was tens of thousands. That came from my blue chip company (TI) options back in the day.
Founders stock would have been a different story...
Founders stock would have been a different story...
I happily negotiate away stock options in favour of signing bonuses or better still, salary.
I don't want your equity. Pay me.
I don't want your equity. Pay me.
Ought to have an option for people who lost money trading options.
$0, had them with 2 different companies, both became worthless.
I made over 6 figures from a post-IPO, listed company.
So, 7 figures?
Probably still six figures. A lot of people have "$100k" in their heads when they say six figures. So when they say "over six figures" they often mean $200k-900k, not literally seven figures.
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You see I had some Sun stock left over from working there (about 8,000 shares) which at $60 a share in 1999 was $480,000, but after a reverse 3:1 split and selling them at $6 each in the Oracle merger they only netted me about $16,000. I "could" have sold them when they were $480,000 but I didn't. Not as severe a challenge as some folks in the dot com implosion but its something I think about from time to time.
If you ask what was the most money your options were worth on paper you get another (often higher) number. So if you were a Zynga employee on the day they went public you had some big value that they were worth but you couldn't sell until much later, and much later they were worth much less.
I owned 30,000 shares (common, not preferred) in a startup that I advised which when it was acquired only met the liquidation preference for the preferred (common stock ended up being worthless). At the last round of funding it was 'valued' at about $150,000 though. :-)
The bottom line is you can drive yourself crazy with possibilities if you aren't careful.