I write about employee stock options and equity compensation in a way that is easy to understand.
Incentive stock options may be offered as part of an employee compensation package. In a best-case scenario, these options can offer an invaluable benefit to you as an employee. You may benefit most if your company offers incentive stock options (or ISOs) at a low...
Many financial planners will suggest that you allocate no more than 10-15% of your investable net worth into a single stock position. That range can allow you to benefit from the potential upside of a growing, successful company, without leaving your assets too vulnerable to a less-desirable outcome if the company underperforms.
When a company wants to reward and retain talented employees by offering them equity compensation, Restricted Stock Units (RSUs) are a common grant of choice. Any form of equity compensation can fill this role, and some companies even offer a choice. But RSUs are appealing for their relatively straightforward life cycle compared with other types of equity compensation.
If you are on the receiving end of equity compensation in the form of employee stock options or restricted stock, it’s easy to get excited about the prospects of an increasing stock price and how that can positively impact your financial future. Company stock can offer non-financial benefits as well, like making you feel invested in the company, like a team player, and that all your hard work is worth it.
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.
Receiving employee stock options from your employer is great, as it indicates that your company sincerely values you. They want to keep you, and keep you happy! Furthermore, stock options can be a fantastic opportunity to generate wealth. However, knowing the right moves to maximize this complicated form of equity compensation is not easy.
Spelling lists, multiplication tables, practicing your cursive (do kids today even use cursive writing)? Remember leaving school for the day and thinking “I can't believe I have homework, homework is the worst!” All I wanted to do was go play kick the can with the...
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.
