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Once my options vest, according to the EMI scheme I have ten years to exercise them.

I'm weighing up the pros and cons of exercising exactly at the point they vest versus leaving it to the last minute:

Pro of exercising late:

  • Far less risk: no up front money, and for most companies, it's very likely if they perform well they will sell in those ten years, so I might not even have to exercise them myself (it will be handled automatically so no upfront cash from me needed)

Pro of exercising early:

  • I will be a shareholder, so there will be certain benefits such as dividends
  • Once the shares are mine, they are far harder to lose than vested options - maybe dependent on the contract, i.e if you leave the company you lose the ability to exercise the options (I think some contracts may allow you to keep the options for ten years even if you leave)

Are there any pros of either I'm missing, maybe tax advantages in certain situations?


The only relevant question I found was Is there a reason to exercise a stock option as soon as it vests? which seems US-based. I've looked into long-term capital gains in the UK (if it even exists) but I didn't find anything about it.

  • Your EMI scheme documents should tell you what happens if you leave and how vesting works did you not get this paperwork? EMI share schemes are very different in terms of tax no income tax reduced CGT rate and so on – Neuromancer Jun 22 at 0:33
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The main pro of exercising early is that you can sell the shares and diversify your portfolio. It depends on how much the options are worth compared to your other savings. It’s foolish to have most of your savings invested in a single company. It’s positively reckless if that company is also your employer and you stand to lose both your job and your savings if it goes bust.

  • Does depend EMI schemes are quite different to other approved share schemes - ours only vest if the company is sold. One advantage to vesting early is you potentially have more time for the stock to increase in value and to use more of your EMI allowance up – Neuromancer Jun 22 at 0:28

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