Some companies offer employee stock grants as part of a compensation package to help attract, retain, and reward key employees. Both the business and the employee share the hope that the stock price of the company will increase over time, which in turn can increase...
There are many reasons to exercise your employee stock options: a pending retirement that might require re-allocating assets; an approaching expiration date that warrants a “use it or lose it decision; a strategic exercise plan that integrates tax and financial...
When dealing with employee stock options, the conversation usually centers around issues of income tax and investment risk. We talk about taxes because the amount of tax you pay has an impact on how much money you actually receive when you finally sell your shares....
There is no easy way around it, employee stock options are complicated. And depending on the type of stock options you have, how many you have, other types of employee stock options you own -- along with all your other specific financial planning needs --...
If you own company stock or employee stock options, it’s possible that you have experienced market volatility and have seen firsthand how a quick change in the stock price can materially impact the value of your stock options. A rising stock price can quickly change the value of your stock options positively. Potentially to such an effect that it can create a concentrated equity position that should be evaluated.
Access to employee stock options represents an agreement between you and your employer that allows you to purchase a specified number of shares of the company’s stock at a fixed grant price for a specified period. If the future stock price appreciates above the stated...
The decision to exercise your employee stock options can be a difficult one, regardless of whether you have incentive stock options or non-qualified stock options. You have to consider potential tax implications, whether or not you have the necessary cash flow to...
When it’s time to exercise your employee stock options, you generally have one of two options to consider: you can do either a cash exercise or a cashless exercise. The right choice for your situation will depend on a number of factors specific to your finances, your...
Employee stock options may be issued as part of an employee compensation package. Companies may offer this type of equity compensation as a way to reward key employees and retain top talent. If the company does well, and the stock price increases, the employee can...
When you exercise your employee stock options, you may want to consider one of the following options to implement the exercise: A cash exercise, or a cashless exercise. This is not an exhaustive list of options. You may run across other terms such as sell-to-cover, same-day sale, or share withholding. While some of these terms are interchangeable and result in a similar outcome, you should check your plan details prior to implementing any specific exercise strategy.
Whether you’re just getting started or expanding your knowledge, here are some resources to get you started.
Understand what you have, what you should consider, and what ultimately matters to you.
I write about equity compensation and employee stock options in a way that is easy to understand.
Understand what you have, what you should consider, and what ultimately matters to you.
Get the Ultimate Guide to Incentive Stock Options to better understand your equity compensation.
