In contrast to the ISOs and NSOs customarily offered to select individuals, employee stock purchase plans, which also are designed as stock option plans, offer participation to a broader class of employees. The employee stock purchase plan is less often considered a compensation technique but rather is viewed as a means by which employers can assist their employees in purchasing stock through payroll deductions. Summary While beneficial to issuing employers for the reasons described above, stock options also offer employees and others opportunities for sometimes sizable windfalls. They are however, quite complex. Optionees who do not receive sound and reliable advice can make poor decisions regarding when to exercise, when to sell and when to hold.
Some companies do a fine job educating their employees about their option programs.
Many others, however, do not. It therefore is essential that optionees have a high degree of familiarity with their options. An optionee, particularly a first timer, would be well-advised to hire a reputable financial planner or certified public accountant to assist in navigating the myriad rules and planning considerations relating to options. Otherwise, after a few ill-advised option exercise and share sale decisions, the optionee may very well prefer to discuss Monday Night Football at the office water cooler.