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Why you won’t get rich on stock options

By , June 11, 2010

There’s stock and then there is stock.

Ron was about to walk into a fan. He interviewed with a CEO who was quite interested in hiring him for an executive level position in which compensation was greatly offset by common stock. Ron saw the pot of gold at the end of the rainbow and was about to sign on.

My colleagues and I knew a lot about the company and indeed, the hiring manager. He had a carefully hidden reputation of hiring excellent executives based on the promise of a fast liquidity event and huge piles of stock. When the event occurred, years after the promised deadline, he invariably negotiated stock transfers which left current employees pennies on the hoped-for dollars. The net affect was investing and eventual purchase of the company was attractive because it had a very low operating budget due to extremely low salaries. Continue reading 'Why you won’t get rich on stock options'»

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