What You Should Know About Cash Exercises of Employee Stock Options

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 planning. Coming up with “why” you might want to do a cash or cashless exercise of your stock options is easy. But equally important is knowing “how” to do your exercise. When you exercise your...

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 goals, and your needs and challenges to address. But that being said, let’s assume that you’re interested in a cash exercise — and need to know all the...

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.