Chief Technology Officer of a small company – Salary of $150,000 a year plus up to a 10% annual bonus based on company performance. He would receive 3,000 incentive stock options and 6,000 nonqualified stock options on his first day of employment. He would receive similar grants every year. The options vest 1/3 a year for three years. The stock is currently worth $20 per share which would be the exercise price for his first set of options. Ted expects to exercise the options each year as they vest, and he would hold the stock just over one year before selling. The company would pay for the following benefits:
Group term life insurance with a face amount of $600,000.
Group disability insurance with an annual benefit amount of $100,000 and an own occupation definition of disability.
Medical insurance under a POS plan with a $1,000 per person deductible and a $2,000 family deductible. There is a 20% co-payment provision with a $5,000 stop-loss provision including the deductibles.
4% match on his 401(k) contributions from his base salary with a two to six year graded vesting schedule.
$10,000 annual contribution to an unfunded deferred compensation plan.
Tickets to the company box at the local NFL football stadium once per season.
Director of IT for a family owned company – Salary of $175,000 a year plus up to a 20% annual bonus based on company performance. The company would pay for the following benefits:
Group term life insurance with a face amount of $525,000.
Group disability insurance with an annual benefit amount of $100,000 and an educated and trained for definition of disability.
Medical insurance under an HMO plan with a $25 per visit charge.
$10,000 annual contribution to a deferred compensation plan held in a secular trust.
$20,000 annual phantom stock plan with a 5 year cliff vesting schedule.
Defined benefit plan with an annual benefit in retirement equal to 25% of his average salary the final three years. There is a 3 to 7 year graded vesting schedule, and a 1 year of service requirement for participation.
Membership to the local country club.
Ted has asked you, his financial planner, to help him decide which job offer to accept.

Q: List specific assumptions you need in order to make a recommendation. (e.g., we assume Ted is 40 years old) and based on the information in the handout and the assumptions you listed above, which job offer should Ted accept? What is your justification for your recommendation?