Questions tagged [employee-stock-options]

ownership of company given to employee, generally in start-ups instead of giving cash rewards. Also used by listed organisations as a mechanism for employee retentionship

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19 views

What are the differences between IPO and Direct Listing, esp for employees?

If a pre-IPO company is evaluating whether they should go IPO or Direct Listing, how would either option affect employees? Let's say the employees have some combination of NSO, ISO, RSU. IPO may be a ...
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27 views

If I have a fixed amount to invest, should I exercise and hold NSOs or ISOs of my company?

I am trying to play some scenarios to compare opportunity costs and hopefully decide on which route, to maximize my gains (after all taxations). I formulated a spreadsheet to help me calculate a few ...
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43 views

Can timing the exercise of stock options based on material non-public information be considered insider trading?

Suppose I strongly expect, based on material non-public information, that a public United States company in which I hold incentive stock options (as a current or former employee) will see an increase ...
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21 views

US tax implications for UK EMI (Enterprise Management Incentives)

I am a dual US/UK citizen, permanently resident in the UK. I have a job offer which includes EMI (Enterprise Management Incentives), also known as share options. As a US citizen, I have to file a US ...
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102 views

AMT ISO deferrals for nonimmigrant. Sold shares after leaving US

I lived in the US from 2013 and 2016 on an E-3 nonimmigrant visa. As part of my full-time employment contract, I was granted ISO shares in a pre-IPO company. I exercised most of the vested shares in ...
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10 views

non qualified stock options long term capital gains rate vest timeline requirement

I've read that for ISOs to get a long term gain rate you need: The options to have vested at least two years ago The option was exercised at least one year ago For NQ/NSO, I've read that 2. is ...
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1answer
56 views

Non-qualified stock options tax optimization strategy

I'm trying to understand the best strategy for reducing tax liability with non-qualified stock options. Assuming the stock price will only ever increase Exercise all newly vested options as soon as ...
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1answer
153 views

Can Directors issue themselves shares during raise?

I was wondering if it is legal for company directors that also work and operate the business to gift themselves shares during a capital raise in order to retain their controlling interest in the ...
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1answer
41 views

Where are RSUs issued from?

Beginner here. Let us say, I join some company X. They offer me 400 stocks over 4 years of vesting period. Similar to me, there will be hundreds of employees who will be joining everyday. Doing a ...
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40 views

Are employee stock options the same as warrants?

What's the difference between employee stock options and warrants? From my understanding, both of them are almost the same: both are issued by the company, and both dilute the existing shares when ...
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26 views

How to distinguish insider purchases from stock option exercises?

I've read that large insider stock purchases are considered a good confidence signal for its near future. But, as I understand, the SEC reports about insider purchases may also include stock option ...
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1answer
100 views

US Tax implications? Bought stock options, paid AMT, company acquired at a loss, options worthless

Scenario (numbers are for illustrative purposes only): 2017: I exercised options when I left my former employer (startup, not public). Exercised 100% of 10,000 ISOs, common stock. At a strike price of ...
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1answer
119 views

Why are stock options named as they are?

Why are ISO stock options termed "statutory"? Because they are defined by some sort of statute? If so, then what is the statute? Similarly, why are ISOs termed "incentive" stock options whereas NQOs ...
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76 views

Incorrect amount of shares on a 83(b) election form

My question is about a 83(b) election form during early exercise of ISO. I've worked in a company for quite some time and was awarded ISO in 2017: 50k shares at a strike price of $0.02c. A year later ...
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1answer
81 views

If employees exercise options that they are given by the company, will that increase the number of outstanding shares?

Question is simple If employees exercise options that they are given by the company, will that increase the number of outstanding shares? If yes why and if no why.
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1answer
106 views

Are there risks to having money in an ESPP if the company fails before the purchase date?

I work for a company that offers an ESPP. Employees can put money toward the plan throughout the first half of the year, and it is converted to stock at a 15% discount at the end of Q2. Stock can be ...
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5answers
15k views

How can I sell my shares in a privately-owned company I used to be employed by?

Basically, I was a software developer at a company and I was issued some stock options early on, before the company grew significantly. The company then hired a CEO who pledged to take the company ...
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9answers
548 views

Are stock options worth as much as shares?

I was undergoing salary increase negotiations (after a year) recently and it was decided a percentage of my salary was to be paid in shares. However, when the offer came, I noticed I would be getting ...
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0answers
41 views

S Corp Options Exercise Tax Benefits

I have options to purchase stock in a S Corp. Is there any tax advantage to exercising those options at least one year prior to a sale of the company for capital gains tax purposes or does concept not ...
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1answer
42 views

IRS CP2000 for Company Retention Stock Options

I was granted company restricted stock with a vesting period of 4 years. I was under the impression that upon vesting, the stock is taxed and that's all I owe. I could then sell the stock and that ...
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2answers
172 views

How do shares work when a startup is acquired?

I'm trying to estimate the value of stock options for a startup company which might get acquired in the near future. The problem is that I don't know how to incorporate the shares into the formula. ...
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1answer
113 views

Weighing unvested RSU's against stock options in a job offer

I currently have unvested restricted stock units with my employer. It's a very stable publicly-traded company. I received a job offer from a private company hoping to IPO in the next few years and ...
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0answers
95 views

Borrowing or raising funds against ISOs

I have some ISOs that are exercised (early exercised/bought) from two different companies I worked at. Their current values are around $15k each. These amounts aren't enough to transact with ...
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2answers
310 views

What are the most common partner equity distribution for startups?

Background I'm doing some due diligence regarding a US registered (Delaware C-corp) tech startup in Europe, where the founders are located and living in the EU. Although the business idea is very ...
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1answer
142 views

ISO exercise limit before triggering AMT

With recent 2018 changes to AMT, I wanted to understand how much ISO options can I exercise without making a material difference in AMT Scenario Current income 200k Claiming standard deduction for ...
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1answer
180 views

Purchase Stock but cannot pay AMT

I was released by my company and I had to purchase my ISO's within 60 days of leaving the company or lose them. The issue is to purchase them would mean around a $1.2m AMT & State Tax Bill next ...
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1answer
172 views

Can an employee be paid 100% in stock

Can an employee of a publicly listed company (Google, Facebook, Amazon,...) ask to get paid 100% in non-vesting stocks? If so, would the employee be able to defer paying taxes until he/she sells the ...
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28 views

Optimal allocation to different employer plans to reduce tax bill in current year

I am a canadian citizen that work for a canadian employer and this is how my allocation to the various employer provided plans look. I read that I am required to pay taxes on the EPSP. Can someone ...
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48 views

ICO token vesting if I quit

I am part of a post-ICO company that awards me tokens as part of compensation. My employment contract only mentions that x amount of tokens would be vested over y years with no cliff/any other vesting ...
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1answer
68 views

Executing vested options : How much tax I need to pay

I am working at a startup in California, USA and I was given some options of the type ISO, with a four year vesting period. Very soon, I will complete one year and I would like to execute 1/4th of the ...
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29 views

Canadian citizen, working for a US-based company in Toronto. How will exercising my stock options work in terms of the IRS and the CRA?

I work for a US-based company, but in their Toronto, Canada offices. On a monthly basis, I receive some amount of stock options in the Private corporation, which is based in the USA. I can exercise ...
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2answers
744 views

Offer Letter: What does “option to purchase” shares mean?

This is the first offer I have got. I do not understand a word about stock options. Please explain this to me: Subject to the approval of the Company’s Board of Directors or its Compensation ...
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153 views

Accounting for monthly vested stock options as compenstation in GnuCash

I am working for a company that has recently gone public. Now I see a monthly accumulation of options vesting every month. I would like to account for these options as compensation in my accounts. ...
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1answer
111 views

Best financial model to proportionally distribute the company's income to all employees? [closed]

I plan to start a project of something "innovative". And among some of the parts of the project that I'm thinking about, it's in the term of how money (profits) should be distributed. The truth is, I ...
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1answer
191 views

How many times can I exercise a stock option?

I was granted an employee stock option about two years ago. Almost half of it has vested. The company I am with is doing very well. Every month a little more of my option vests. I have not exercised ...
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0answers
123 views

Stock Options in Exchange for Salary

I received an offer letter with with the option to convert part of the salary to stock options as per the below table. Base salary is ₪33K/month (Israeli Shekel). Be aware of '₪' vs '$' in some ...
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1answer
131 views

Is my 83(b) election still valid?

In 2016 I filed an 83(b) election for some ISOs I received as part of my employee compensation. I did not completely understand the 83(b) election when I made it, I still don't to be honest. There are ...
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1answer
226 views

If my ISOs are converted to NSOs, do I still have 90 days to exercise my vested options as ISOs?

Let's say I have a bunch of incentive stock options (ISOs) in a company that have vested but I have not exercised yet. If I were to leave the company, I have 90 days to exercise them with ISO tax ...
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1answer
103 views

Another word for this kind of 'Corporate Bond'?

I'm currently working at a company that was acquired in the not too distant past. The company is still relatively small and still has a "start-up" mentality in a lot of ways, for better or for worse. ...
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2answers
196 views

I sold my earned incentive stock options back to my employer - how is the money taxed?

I recently sold my vested incentive stock-options back to my employer (i.e. so rather than having to spend $20,000 of my own money to exercise my options and make very little paper gain initially, I ...
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0answers
37 views

Tax Basis and Bargain Element for Incentive Stock Option on Foreign Stock Exchange

The US company I work for recently went public, however the powers that be chose to do the IPO on the Australian Stock Exchange (ASX). I am based in the United States. My stock option strike price ...
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3answers
735 views

How to know FMV of ISOs?

I'm researching when is best to purchase ISOs I've been vesting at a private venture-backed startup. My understanding is that when I exercise, AMT will trigger and I will have to pay those taxes based ...
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2answers
392 views

Does AMT affect cost basis of future capital gains?

Suppose I exercise 10k stock options for $1/share, and fair-market value is $2/share. Normally, taxes are deferred until when I sell them. And when I sell, the basis for capital gains is $1/share. ...
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2answers
305 views

Can the board of directors block a key employee from selling vested shares?

The shares are no longer restricted and are fully vested, and there are no upcoming announcements or other inside information that may affect the share price. It just smells like a conflict of ...
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1answer
72 views

AMT Tax on Company Stock Options

I must exercise approx. $100k in company stock options in the 1Q19 as they are expiring. My estimated 2019 income is $235k. Any advice on minimizing AMT tax of 28% on the est. $175k in profit when I ...
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0answers
349 views

Exercise a stock option in a US-based company as a non US tax resident

I'm given 1000 stock options (all vested) at $100 strike price per option. Current stock valuation is $1000 per share. As I understand, if I exercise I'll pay $100K out of my pocket and I'll also get ...
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1answer
1k views

Is there a reason to exercise a stock option as soon as it vests?

Background: I am currently employed by a start-up that, so far, is doing really well. As part of my contract, I have stock options that will come available on a typical vesting schedule. A quarter of ...
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2answers
171 views

Incentive stock options, tax lots, and long-term capital gains

I have shares of a company I got from exercising before the company went public. Some shares I've held for less than a year, some for more. I exercised all the options after holding them for a year. ...
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1answer
74 views

What is the cost basis when selling shares received as part of an acquisition?

If I vested 100 options in StartupCo at a strike of $1 and I exercise then I will have paid $100 for those shares of StartupCo. If BigCorp acquires StartupCo and I receive $5 and .25 shares in ...
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1answer
411 views

Tracking employee stock option grants in GnuCash

I've been using Gnucash for a while now and I'm starting to feel like an accountant. :) Anyway, I've been interested in trying to map out employee stock option grants for a while to form a more ...