It's all about the benefits.
As graduating University students perform the dreaded job search, job hunters increasingly are weighing a job's benefits in addition to the salary package. Health and dental insurance, vacation time, company cars, health clubs with personal trainers, 401K plans, tuition for advanced degrees and now, more than ever, stock options, all are part of the ideal job package.
But while stock options may seem like a gold mine to those about to work for up-and-coming businesses such as Internet startup companies, the market's recent volatility has shown that technology stocks cannot always be relied upon to be a safe bet.
For example, three months ago, a new employee who had a signing deal with MicroStrategy, a Vienna-based software company, to get 500 initial shares of the stock would only have ten percent of his bonus now.
"Right now, tech stocks are down, but I don't regret taking the stock options because I know that they will recover," said Junaid Khan, a MicroStrategy consulting associate and 1999 Commerce graduate. "It's important to do research on the company that is offering you stock options."
Stock options are very attractive because of their financial potential. Even the secretaries who were with Internet giant America Online when it first started are wealthy now because they had stock options. But it all depends on the company, since not all stocks will be as successful as AOL's stock.
"As we are seeing now, having stock options isn't the most glorious thing in the world if the stock does not continue to rise," fourth-year College student Jay Lasus said.
For this reason, it is important to weigh the base salary prospects against the salary and stock options.
"If the base salary is close to that of other companies, and on top of that they offer you stock options, it's a good deal," Khan said.
But if a company promises the employee a certain number of shares at less than the IPO (initial public offering) upon signing, and the company ends up folding, the worker has sacrificed getting a better salary elsewhere - so there are benefits to going into an older, more established company.
Stock in companies like Coca-Cola or General Electric tends to see slower, steadier growth over the years. But at least this stock is dependable. Some of these companies will offer stock to employees at a reduced market rate.
"I'm just looking for a company that is fairly established that I can feel confident about having a positive experience at," Lasus said.
But if stock options from older, more established companies do not offer reduced prices, one might consider the advantages of putting his money to better use elsewhere in stocks that get a higher return.
Sometimes it is better to stay with slow but steady growth because there can be some risk of starting out with a small company.
In a newer company, on the other hand, it is sometimes "easier to advance, and you feel that what you do actually makes a difference," fourth-year Engineering student Gee Holmes said.
Stock options in a budding industry also make employees feel part of the bigger picture.
"Stock options were important to me because I felt that I had a part in something that I believed in. It was a great motivator," Khan said.
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