| We are in the middle of possibly the worst recession in | | | | a down economy because they don't cost the |
| American history. People are getting laid off right and | | | | company anything out of pocket. |
| left and there doesn't seem to be any end in sight. If | | | | Options usually come in three variations. These include; |
| you are one of the lucky ones to still have a job, or | | | | incentive stock options, non-qualified stock options, and |
| have just received a new job, you may feel a little | | | | various forms of hypothetical stock usually called |
| apprehensive about negotiating a higher salary; even if | | | | stock appreciation rights or sometimes called phantom |
| you deserve one! | | | | stock plans. |
| Since the economy is in such bad shape, why not try | | | | Incentive options and non-qualified options are actual |
| this technique to increase your compensation levels | | | | stock while hypothetical stock or phantom stock may |
| without increasing your straight salary, or I should say, | | | | not involve actual stocks. Regardless, in all three cases |
| without increasing the "cash" part of your salary. What | | | | you would need an increase over the initial stock price |
| the heck am I talking about? I'm talking about | | | | at the time the option was issued before you can |
| alternatives to straight salary, or non-cash | | | | exercise the option and actually benefit from it. |
| compensation. | | | | Stock options will require tax planning on your part. Be |
| You may suggest to your new employer that they | | | | sure to negotiate free tax planning advice from your |
| lower or give you the minimum range in cash | | | | employer. Let me make that clear; I don't mean getting |
| compensation, but make up for it by increasing the | | | | advice from the employer I mean that your employer |
| non-cash compensation part which may be easier for | | | | will pay an accountant or legal professional who is |
| your employer to do within the current state of the | | | | licensed to give advice in this area for you. |
| economy. It also shows that you are a team player, | | | | Stock options in my mind are the best non-cash |
| and willing to help out the team in any way! | | | | compensation. I did mention earlier in the article |
| So what are these non-cash compensation things that | | | | employee benefits as a feasible non-cash option. |
| I keep talking about? Well they include stock options, | | | | Perks and employee benefits would be included in this |
| employee benefits, perks such as company cars and | | | | sort of thing. I'm not going to go into those in greater |
| limousines, club memberships, and things like that; as | | | | detail because they aren't as valuable or as fungible; |
| well as low interest rate loans and free financial | | | | that is, not as easily converted into cash as stock |
| planning advice. Basically, we're talking about anything | | | | options are and therefore may not be quite as |
| that is not cash. | | | | acceptable to you in lieu of cash salary. |
| Maybe the best non-cash compensation is stock | | | | However you end up splitting up the non-cash |
| options. Options make a lot of people nervous | | | | compensation, keep in mind that the economy may |
| because on any given day the stock market can go | | | | turn around in the future at which point you may be |
| up or down. If the stock market goes down, your | | | | able to negotiate a decrease in non-cash |
| options aren't worth as much. And also, stock prices | | | | compensation and an increase in cash compensation. |
| don't always reflect the companies true earnings or | | | | Be sure to discuss this before hand, that is to say, |
| true worth. | | | | before you agree to take any non-cash compensation |
| Regardless of these objections, stock options continue | | | | offers that your company may provide. |
| to be a fantastic non-cash compensation, especially in | | | | |