Stock options: How much do you deserve? Also, a self-proclaimed Unixhead asks whether Unix or NT will be the more profitable path

June  1998

Edgar counsels a Sun sysadmin about whether to follow Unix or NT. He also discusses stock options for those who participate in the risk and excitement of start-ups and IPOs. And finally, he suggests remedies for an e-mail mistake: An anxious employee hit the wrong button and now fears his career may go up in smoke. (1,400 words)

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ear Edgar,

I used to work as a Sun sysadmin, but have recently been doing more and more with NT. I'm still fairly young and think I should really specialize in one or the other. Which will be a more profitable path? Which do you think is a better career move?

Unixhead

Dear Unixhead,

At this point in time, people with good Unix skills are simply more marketable. We are finding it increasingly difficult to find good Sun sysadmins and almost as difficult to place good NT people.

That doesn't mean that NT technology isn't booming. It's just that the network administration part of it is not as in demand. Microsoft has done a tremendous job of training people on its technology. Two years ago there were only about 6,000 MCSEs; today, there are nearly 30,000. Plus, it doesn't require as much technical sophistication and training to administer an NT enterprise as it does an equivalent one running Unix. In addition, it takes fewer people to run an NT-based network. So, according to the laws of supply and demand, Unix skills are certainly on top.

I can't predict with certainty which twists and turns the industry will take in coming years, and will only give you the advice that you must stay current. You must be aware of the big trends, and be somewhat adaptable in what is a fast-changing field.

As for today and the days just ahead of us, Unix is still huge, and your skills are valuable. At the same time, NT is only gaining speed. Since its introduction, more NT licenses have been sold than for Unix (and all its flavors) throughout its entire lifetime. It is estimated that NT will have representation in nearly 100 percent of this country's heterogenous networks by the year 2000. So, if you decide to go with Unix, just be sure to keep up on your MS skills -- these will continue to factor in.

Dear Edgar,

Do you have any information on what kinds of stock options are offered to employees of high-tech companies? Specifically, I am interested in options that would be offered to a person with highly valuable technical skills who is one of five or six people that will make or break the company. Any information would be greatly appreciated.

Thanks!

Cashing In

Dear Cashing In,

First, take a look at the article I wrote a while back on the topic of start-ups, in which I discuss the kind of salaries that can be expected, including stock options:

http://www.sun.com/sunworldonline/swol-04-1996/swol-04-career.html

It's a complex area that varies widely, with no straight and simple answer. The best thing to do is look at examples, general trends, and the terms of the deal.

The top executives at a lot of start-ups are given options of a few to several percentage points. In the case of one company that went public in the last year, the CFO received 3 percent of what was a very large IPO. Be aware, however, that the numbers vary widely, depending on the size of the company and its venture funding. In a smaller company that recently went public, I watched the president receive a full 10 percent of all outstanding shares.

To understand what you're getting into, it's important to look at the basic terms. The strike price is the reduced rate at which you can buy the shares. This price changes for different people depending on when they come on board. The vestiture is the time it will take you to actually acquire the shares, for which you have options. Some situations will stipulate, for instance, that you can buy 1,000 shares over the course of four years, or a maximum of 250 per year at the strike price.

Once you have received your options, you then need to place it into the larger picture to see what it's really worth. It may sound great if you get ten thousand shares, but what's the size of the entire pie -- ten thousand shares of how many?

If you were in on the ground floor and are contributing heavily to this adventure, you should receive good compensation for what is ultimately a risk. As a top technical person -- a senior person and a key player -- in an up-and-coming company, you should expect to receive, in today's good market, stock amounting to somewhere in the range of a million dollars. (Realize that this is a very general figure. Also be aware that this may be covered by only about a half a percent of the outstanding stock.)

In the end, of course, the success of the company determines the value of your options. A million dollars in bad stock could be worth a wooden nickel overnight. That is the risk and the excitement of start-ups and IPOs.

Dear Edgar,

A friend sent me a funny video file in which a guy slams his computer, knocks it off his desk, and kicks it when it's down. I forwarded it to another friend in my company with a few words about how we're getting jerked around by our boss -- he long ago promised raises, but when they finally came through they were far below expectations. It was a slight -- I would go so far as to say an insult. In the mail with the video, I called our boss a "dirtbag" and mentioned how a third friend in the company was already shopping his resume around.

A few minutes after sending it, I realized that I replied to the message instead of forwarding it. It was originally sent to the whole department. So, instead of going to my friend, it went to the whole department. I'm pretty sure my boss got the mail, but he hasn't said anything yet. The third guy, who's shopping his resume, can't be so happy.

Should I apologize, hope it goes away, or just start looking for a new job?

Anxious

Dear Anxious,

First, send out mail back to the same e-mail alias, briefly apologizing to the group for the misdirected note and to the individuals who were mentioned. Don't be too specific here -- a terse, general note will do. You want this event to die quickly, and anything too verbose will potentially entangle you deeper.

Second, call your boss and try to sort out the problem. One approach is to downplay the insult as hyperbole and explain that you were exaggerating the situation about what was really a more general "boss." You might also want to bring up your real concerns. Maybe it's time to tell him that you feel insulted, if you haven't already. There's not much to lose at this point.

Expect the worst. If you are dismissed, just look at it as a learning experience. Your first wrong move was to write about people in the company on the company e-mail system. E-mail isn't like registered mail; it's more like a postcard. For future reference, never send out anything in unencrypted e-mail that would really compromise your position if it fell into the wrong hands -- particularly if you're not so sure how to use the reply and forward buttons.

And, generally, try not to refer to your boss as a dirtbag, unless you're absolutely sure no one is listening.

Resources

• "Start-up fever," April 1996 Career Advisor column in SunWorld http://www.sun.com/sunworldonline/swol-04-1996/swol-04-career.html
• Full listing of previous Career Advisor columns in SunWorld http://www.sun.com/sunworldonline/common/swol-backissues-columns.html#career

About the author
Edgar Saadi is senior vice president of Pencom Systems Inc., the largest open systems/advanced systems recruiting firm in the U.S. He specializes in guiding advanced systems careers and helping employees explore all staffing alternatives. Reach Edgar at edgar.saadi@sunworld.com.

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URL: http://www.sunworld.com/swol-06-1998/swol-06-career.html
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