Consider Your Options: Get the Most from Your Equity Compensation, 2005 Edition [Paperback]

Kaye A. Thomas (Author)

Book Description

Publication Date: January 1, 2005

This is the latest edition of the most popular book on this subject, providing a plain language explanation of employee stock options and related forms of equity compensation. It continues to be the best selling book on this topic because no other book can make these claims:

* Written in a direct, informal style that makes it easy for a novice to read, yet authoritative enough to be used by a tax professional or investment advisor.

* Covers nonqualified stock options, investment stock options, restricted stock, restricted stock units and employee stock purchase plans.

* Includes a balanced discussion of investment aspects, covering advantages of holding employer stock as well as the risks in failing to diversify.

* Provides the clearest possible explanation of complicated tax rules such as the way alternative minimum tax (AMT) applies to incentive stock options.

* Stresses sound planning and warns against faulty strategies.

* Offers pragmatic tips on topics like record keeping, selecting an advisor, and paying estimated tax.

* Updated for recent changes in the tax law and other developments.

The 2005 edition is a major revision from the previous edition, with new design, content and organization to make it even easier for employees to learn what they need to know about their equity compensation.

* Reflects tax changes occurring in 2004, including new regulations for incentive stock options and new rules for nonqualified deferred compensation.

* Now covers restricted stock units (RSUs).

* New chapter on how to select and work with an option advisor.

* New graphics and callouts make it easier to grasp the main points.

Editorial Reviews

Amazon.com Review

Just about everyone has heard a story about a corporate secretary or twentysomething Microsoft employee who retired early--as a millionaire--not because of winning the lottery, but because she exercised the stock options granted by her company. The fact is, many, many working Americans have access to stock and option plans in the workplace, and although it is a bit of a stretch to assume that such plans are a guaranteed ticket to riches, equity compensation can be an intelligent means for building wealth. The trick, according to Kaye A. Thomas, is understanding and handling it properly, and this is where Consider Your Options comes in.

Thomas, a veteran tax lawyer, has written a straightforward, no-nonsense, plain-language guide to getting the maximum value from your equity compensation. He begins with the basics--what stock is and how to buy and sell it, stock grants and purchases, options in general--and proceeds with clear examinations of nonqualified and incentive stock options. From there, he leads the reader through the ins and outs of exercising stock options, vesting, and employee stock-purchase plans, with an emphasis on tax implications and financial planning (an entire section of the book, for example, deals with the Alternative Minimum Tax).

"There are certain things about stock, options, and taxes that are almost never explained because every idiot knows them," Thomas writes. "Unfortunately, there are many normal, intelligent, educated adults who don't know these things--because hardly anyone ever bothers to explain them." Now that Thomas has bothered, novices and experts alike can avoid the common mistakes and poor planning that jeopardize the highest return from these benefits. --Svenja Soldovieri --This text refers to an out of print or unavailable edition of this title.

Review

The best primer we've seen. -- Forbes Magazine --This text refers to an out of print or unavailable edition of this title.

See all Editorial Reviews

Product Details

• Paperback: 278 pages
• Publisher: Fairmark Press Inc.; Rev Upd edition (January 1, 2005)
• Language: English
• ISBN-10: 0967498171
• ISBN-13: 978-0967498171
• Product Dimensions: 8.3 x 5.5 x 0.6 inches
• Shipping Weight: 9.6 ounces
• Average Customer Review: 4.5 out of 5 stars  See all reviews (26 customer reviews)
• Amazon Best Sellers Rank: #1,921,639 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

41 of 41 people found the following review helpful:

5.0 out of 5 stars Money well spent, March 1, 2000

By A Customer

Amazon Verified Purchase

This review is from: Consider Your Options: Get the Most from Your Equity Compensation (Paperback)

No matter how well you think you understand the world of stock options, there's a good chance you will find some nugget of information in here that could save you A LOT of money.

In my case, I work for a small company. I actually had the company amend their stock option agreement based on information I found in this book. Based on the projected IPO price, this amendment will likely save me over $100,000 in the future.

A prior reviewer complained about the book and recommended a "tax professional". First, I have read this and Pastore's book, and this is hands down a better treatment of the subject. Second, if you are outside of Silicon Valley, then I wish you the best of luck in finding a CPA that knows anything beyond the basics as far as ISOs and 83(b) elections are concerned.

Buy the book AND find a tax professional. A tax professional does not have such a vested interest in your financial future, and you don't have his vast knowledge of the tax codes. I found that working together with my CPA and this book, we were able to do some excellent tax planning.

27 of 27 people found the following review helpful:

5.0 out of 5 stars Waste no time getting up to speed on Stock Options, April 1, 2000

By 

Ryan (Kirkland, WA, United States) - See all my reviews
(REAL NAME)   

This review is from: Consider Your Options: Get the Most from Your Equity Compensation (Paperback)

One of the few books available today on incentive (ISO) and non-qualified (NQ) stock options this does an excellent job of describing the basic ins and outs of how each type of employee stock option works. Unlike "Stock Options" by Robert Pastore, which is quite dry, this introductory book presents the material concisely and in a well-organized manner to quickly get up to speed. Of course a significant amount of the material found in this book can be read for free on the publisher's website. I would also highly recommend purchasing Pastore's book since it provides more strategies that you can actually apply, but read "Considering Your Options" first and then just flip through Pastore's book this to look at the strategies.

Just keep in mind that both of these books are only a first step at figuring out what you plan on doing. There is no substitute for a good tax account who is knowledgeable in the areas of stock options and estate planning. In addition there are many strategies that exist which aren't covered in either of these books. If you are trying to sort out what your strategy is for exercising your stock options it is well worth your time to read both of these. And you can't beat the price. If nothing else it saves you from shelling out $175/hour to hear an experienced tax accountant educate you on the basics.

18 of 18 people found the following review helpful:

5.0 out of 5 stars Enlightening, educational & defintely worth twice the price, February 29, 2000

By A Customer

This review is from: Consider Your Options: Get the Most from Your Equity Compensation (Paperback)

I bought this book after checking out the reviews on Bob Pastorie's book on Stock Options and after visiting the author's web site. I wanted a thorough understanding of stock awards, stock options, and option strategies.

I'm glad I bought this book. It's packed with facts and how to-do-it information that takes the mystery out of stock options and pre-IPO stock.

This is a complicated subject and the book does justice to everything. I especially liked the first couple of chapters that reviews the basics of taxes and terminology before launching into stock awards and stock options. Despite plenty of examples and clearly written material, this is not a book that you'll read once, and retain everything. The IRS has made sure of that. I will have it close by to refer to. Besides the book, the author's web site is very helpful. He promptly responded to my specific questions. Wish I could say that about others!

There's a great potential to make some serious and costly mistakes when it comes to stock options. Yes, you'll need help from lawyers and tax professionals, but without this book, you won't understand anything they're talking about. In fact, I think you'll spend more than the cost of the book in legal and professional fees if time has to be taken out to educate you about the basics.

I read the book at light speed the first time around. I initially thought that things were confusing and unorganized. I realized that this was a mistake on my part. The subject matter is complex, especially on the various kinds of options and when they vest.

I read the book a second time to get prepared to see my lawyer, tax, and estate planner. The book gave me the knowledge to fashion some specific strategies on my stock grant and also how to exercise my options. The benefits of the book's organization have now become more obvious to me. Is there a negative aspect of the book? Sure. It didn't get into estate planning or suggest ways of sheltering the potential wealth that could accrue from stock and options from firms going to an IPO. I also wish it would have talked more from the perspective of a firm getting ready to do an IPO, although there were some examples of this. I was also only interested in Nonqualified Options and not the exhaustive coverage on Incentive Stock Options that employees usually receive. However, this was no reason to give it less than 5 stars. I think the estate planning aspect is a great subject for Mr. Thomas' next book or something that the web can handle.

Bottom line here: the book is well worth the price and your time. Read it once, twice, and keep it handy. You'll definitely refer to it today and in the years ahead.