Equity compensation is an effective tool for attracting and retaining highly qualified employees. But if you’re like most Americans, it’s unlikely you’ll remain with your current employer all the way ...
Equity compensation is an effective tool for attracting and retaining highly qualified employees. But if you’re like most Americans, it’s unlikely you’ll remain with your current employer all the way through to retirement. The average length of employment is just shy of four years, though this does vary by industry. While we tend to focus on managing your equity compensation as an employee, there’s another important piece to the equation—what to do with your options post-termination. Upon any termination of employment, you still have the right to exercise your vested stock options as discussed below. However, any options that have yet to vest are typically canceled and forfeited, although there may be exceptions in the event of death, disability or retirement. If you’ve already exercised your incentive stock options (ISOs) or non-qualified stock options (NQSOs), those shares are yours to hold or sell as you see fit (barring any other restrictions)—regardless of employment status. But if you have vested options yet to be exercised, terminating employment may prompt rather fast action. In most cases, you may have just a couple of months to decide. What Is a Post-Termination Exercise Window? When your employment with a company is terminated, the post-termination… Read More »
