Equity/stock
If you exercise your stock options, you will receive purchase shares of company stock, or equity, which represent an ownership stake in your company. Once you’ve acquired stock, you own...
Read More Insights
We write about employee stock options, equity compensation, and financial planning in a way that is easy to understand.
Equity compensation
A broad term referring to all forms of stock options your employer may offer you as an employee benefit. For example, equity compensation can be offered in the form of...
Read More Exercise date
The date on which you choose to exercise your stock options.
Read More Exercise (and hold or sell)
Once your stock options vest, you have the right, but not the obligation to exercise them. To exercise your options, you purchase stock shares at their exercise price, rather than...
Read More Exercise price/strike price
This is the per-share price you’ll pay if you decide to exercise your stock options. Your exercise price is usually set as the fair market value of the stock on...
Read More Expiration date
Most stock options have a finite lifespan, after which you lose the right to exercise them. Typically, the expiration date is a set number of years after the grant date—often...
Read More Fair market value (FMV)
The price at which your company’s stock is trading at any given point in time. If the stock is publicly traded, its FMV is whatever price it’s fetching on the...
Read More Forfeiture risk
Until your equity compensation vests, you risk losing it, depending on the terms of the grant. For example, if you leave the company, you may forfeit the right to exercise...
Read More Forfeit Value
A term to describe the future value of unvested RSUs, stock options, and other equity compensation that would be lost if you terminate employment.
Read More Grant date
This is the date your company grants you your equity compensation and establishes its terms—including how much time passes before you become vested in your options, as well as when...
Read More Gross/net value
These terms describe the value of an asset before and after accounting for taxes. An asset’s gross value is pre-tax; its net value is after.
Read More High-basis/low-basis stock
If your company’s stock price increases significantly from the price at which you acquired it, it’s considered a low-basis stock, because your basis is much lower than its current value....
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