Your potential new job includes stock options as part of your compensation package. Before you assume that having a financial interest in your new company is automatically a good thing, ask your new employer these questions:

  • One big catch-all question: How many shares? What is the strike price? And what is the vesting schedule?

  • What kind of stock options — incentive, nonqualified, or a combination of both?

  • Can I please see a copy of the stock option agreement that I’ll be asked to sign?

  • Can I also please see a copy of the company’s stock option plan document?

  • Have there been any changes in your company’s stock option plan in the past 12 to 18 months?

  • (If you’re considering a company before their initial public offering, or IPO) What is the currently planned date or time frame for an IPO?

  • What percentage of the company’s total ownership do the shares on my stock option represent?

  • When can I next anticipate receiving another stock option grant, and under what circumstances (An annual grant? When I’m promoted? As a bonus? Merit-based?)

  • (If you’re considering a company that is already publicly traded) What has been the stability of employees who have big stock option gains — have most stayed or moved on?

  • Are there any tax implications right now for my stock option grant?