Access to employee stock options represents an agreement between you and your employer that allows you to purchase a specified number of shares of the company’s stock at a fixed grant price for a specified period. If the future stock price appreciates above the stated...
You can develop concentrated equity positions in your investment portfolio when you own or control a single stock that makes up a significant part of your overall allocation. While there are many reasons this can happen, one common way people find themselves with a...
The decision to exercise your employee stock options can be a difficult one, regardless of whether you have incentive stock options or non-qualified stock options. You have to consider potential tax implications, whether or not you have the necessary cash flow to...
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...
When the time comes to exercise your non-qualified stock options, you may find yourself asking about the process, the cost, and how it actually happens. This may lead you to ask whether to do a cash exercise or a cashless exercise. Many people default to a cashless...
Employee stock options may be issued as part of an employee compensation package. Companies may offer this type of equity compensation as a way to reward key employees and retain top talent. If the company does well, and the stock price increases, the employee can...
If you have incentive stock options but haven’t made a plan for them beyond “I’ll figure it out later,” you may want to consider the alternatives, and the alternatives are many. One of the many strategies that you may consider is to exercise some or all of your incentive stock options early. How early depends on many factors, but earlier than a faced expiration date.
Non-qualified stock options are a type of employee stock option that is unique in that they retain tax characteristics similar to restricted stock units and employee control and decision-making similar to incentive stock options. From an income tax standpoint, profit is subject to ordinary income tax rates when you exercise your non-qualified stock options.
There are two types of employee stock options: incentive stock options, or ISOs, and non-qualified stock options, or NQSOs. Generally speaking, incentive stock options are the more complicated of the two. These complexities may include holding period requirements, potentially preferential tax treatment, and the alternative minimum tax.
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...
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.
Understand what you have, what you should consider, and what ultimately matters to you.
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.
