Well, there are a couple of scenarios to the nature of stock options. All of them favor the company, and if the options are sold to you at an agreed discount price, then it favors you too.
Either way, I think the basic advice is still the same: Don't sit on too much of your own company stock!
I would set up a system of regularly selling some or perhaps most of your company stock and re-diversify the proceeds back into a proper portfolio. How much stock you keep depends on how comfortable you are with it, and what level of position you hold.
Otherwise, the general rule is not to hold more than 5% of your own company stock versus your overall portfolio, but if you are higher up, you may be forced to hold more than that. Depends on your contract.
This is just my personal opinion, but if given a choice between more pay or stock options, I lean towards more pay.
(By the way, who do you work for that costs $500 per share? Google?
Still, the volatility of the stock or the stock price itself still doesn't change my recommendation.)