I write about employee stock options and equity compensation in a way that is easy to understand.
Created in 1969 as a way to ensure high-income earners paid their fair share in taxes, the alternative minimum tax (AMT) acts as a parallel tax system to the regular federal income tax system. Taxpayers should technically calculate their income twice—once under the...
The choice of when to exercise your incentive stock options can be a difficult one, with serious implications for financial planning and taxes. When your company is still pre-IPO, that opens up an entirely separate set of concerns that you may need to be aware of. The issues associated with pre-IPO incentive stock options (ISOs) are particularly relevant now, as early-stage companies increasingly find private funding sources and delay the date of their IPO. As the length of time between startup and IPO increases, more and more employees are facing the question of the costs and benefits of pre-IPO ISO exercise.
Incentive stock options (ISOs) are a form of compensation distributed by a company to their employees. Typically, companies use incentive stock options as a vehicle to retain top employees, reward specific milestones or successes or as an incentive when hiring new...
An employee stock purchase plan is a compensation tool that may allow you to purchase shares of company stock through convenient payroll deductions. Employee stock purchase plans, or ESPPs, allow you to buy company stock at a discount or a favorable price. Through the...
If you have incentive stock options, you’ve likely heard of -- and perhaps already paid -- the alternative minimum tax. This is the tax due in the years you exercise and hold incentive stock options, or ISOs. You might also be entitled to an AMT tax credit if that’s...
Even though you may pay a higher tax rate by selling your incentive stock options as a disqualifying disposition, you may not want to completely discount the benefits of an exercise and sell quite yet. The alternative, of course, is to earn the right to capture your...
Restricted stock units are commonly used as a compensation tool by employers who want to reward and retain key employees. If you’re on the receiving end of restricted stock units, or RSUs, you could be set to financially benefit if you meet specific conditions set by...
Even if you don’t have plans to leave anytime soon, it’s not unreasonable to consider what happens to your employee stock options when you no longer work for your current employer. Whether due to a planned retirement after a long career, a new opportunity at another...
If you have employee stock options, you’ve likely spent time considering how and when to turn the value of those options into cash proceeds you can actually use. To turn stock employee stock options into cash, you have to exercise and sell them. When you exercise,...
A stock swap can be a great strategy to use if you have employee stock options you’d like to exercise and hold. It allows you to use the fair market value (FMV) of company stock you already own to pay for the exercise cost of newly acquired employee stock option...
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.
