Workers Give Up Get-Rich Dreams, Still Value Stock Options

With their options payouts, some of Tompkins' co-workers at Microsoft chose to retire 10 or 15 years early. Tompkins, age 41, keeps on working, but his wife is able to stay home in their custom-designed house in the Seattle suburbs, and the couple's children are in private school. He refused to say how much profit he has netted from options.

"I count it as a blessing from God, is my way of looking at it," he said.

Like Tompkins, 50-year-old John Jennings, a 19-year veteran of Silicon Valley, didn't give it much thought when he was awarded options at Apple Computer(AAPL Quote) in the mid-'80s. But over time, they started adding up. "They were kind of like the icing on the cake," said Jennings.

He made a timely decision to join Sun in 1993. Though the stock traded below $1 for most of that year, it would soon commence a dramatic run-up extending to August of 2000, when it topped out near a split-adjusted $64.

Back then, Sun employees eagerly awaited annual performance reviews, hoping for the chance to be awarded more options. "It was like if you got an 'A' on a report card; if you did well in a performance evaluation, you got not only a salary increase, but also more stock options," remembered Jennings, now senior director of systems integration at the company.

In line with the stock's seemingly unending rise, Jennings extracted options gains that made it possible for his wife to stay at home to raise the couple's two children. Options financed a vacation home in the Sierra Mountains and allowed him to send his now-grown children to the colleges of their choice, the University of Colorado and Cal Poly.

It would take years for the lessons to unfold, but now it's clear that employees who joined tech companies after the mid-'90s probably missed the options boat. It's not that they didn't get options. They just didn't strike it rich.