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The most frequently asked question is "How many stock options should I receive?" or in effect, "What is the right amount of stock options for my position as a VP/Director/Manager of ___________?"
The quick answer is that most organizations, regardless of size, have established stock option grant "bands" or ranges of amounts of stock options that are to be granted to new hires based upon salary and title. So, if you're a director making a $100k salary, there's an expected range amount of options for that position/salary combination. Let's say, for example, that the option band or range is anticipated to be between 3,000 and 5,000 options.
So your questions should logically be --
1. How many options am I being offered?
2. What is the band or expected range for this position?
3. And, if necessary, why am I receiving less than the full amount offered for this position?
You can't argue the price of the options as this is set by accounting and tax statue in the United States to be the current fair market value of the stock option on the day it is granted by a company's board of directors.
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As a matter of protocol, Board of Directors typically are presented with a number of option grants to approve within any particular Board meeting. The grants are usually made up of recent hires who are receiving an initial stock option grant. The Board will usually ask if these grants are within the pre-established bands for the salary/position combination. If the answer is yes and there are adequate shares available for the option grants in the company pool of stock options, the Board will readily approve the proposed stock options grants. So, if you push for the top end of the available band but don't exceed it -- it won't require much management attention to get approved by the Board of Directors.
Please note: I have written on a few of occasions about employee stock options in a start up. (See links below if you have a further interest.)
Vesting Employee Stock Options
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