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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56
votes
5answers
16k 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 ...
20
votes
3answers
100k views

What typically happens to unvested stock during an acquisition?

I work for a publicly traded company that was acquired by another publicly traded company. I also own shares of "restricted stock units" for my company. All of my shares are scheduled to vest far ...
19
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2answers
4k views

As an employee, when is it inappropriate to request to see your young/startup company's financial statements?

If you work for a young company, equity in the form of restricted stock or options is often a form of compensation and a way to keep you aligned with the company's goals. But as a new employee you ...
16
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5answers
3k views

Confused about employee stock options: How do I afford these?

I'm confused about stock options. The numbers in the following story are fictional because I'm keeping the actual offer confidential. This is an American private company with a promising future: ...
13
votes
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 ...
12
votes
5answers
2k views

What should I do with the stock from my Employee Stock Purchase Plan?

I've got an employee stock purchase plan program. The details are a little tricksy, but I basically get to buy about 2500 shares of company stock at something like $2.33/share... and the stock has ...
10
votes
3answers
3k views

Company just got acquired. What does this mean for my common stock?

I own 200 common shares of a private company I worked for up until about 3 years ago. Today, I read in the news that they were acquired for a LOT of money but I don't know yet what the current stock ...
10
votes
3answers
21k views

Do the tax consequences make it worth it for me to hold ESPP stock?

Disclaimer — I've read What should I do with the stock from my Employee Stock Purchase Plan? and the answers seem to be both slightly wrong (from what I know) and contradictory, which is why I ...
8
votes
1answer
91 views

Capital losses on early-purchased stock?

If I exercise an early purchase clause on employee incentive stock options to go ahead and purchase the stock and the company later goes bust, can I take capital losses against that stock?
8
votes
1answer
284 views

Can I apply prior years' capital losses against my employee stock option exercise?

I'm Canadian, and I executed a "same-day-buy-and-sell" on options granted to me by my employer. My T4 slip has the appropriate taxable benefit called out, but my question is, can I apply my previous ...
7
votes
4answers
384 views

Job Offer - Explain Stock Options [US]

I just got a job offer that I intend to accept, and part of the benefits explanation says, Pending formal approval of the [Company Name Redacted] Board of Directors’ compensation committee, your ...
7
votes
1answer
24k views

Can I transfer my Employee Stock Purchase Plan assets to a different broker?

I'm considering consolidating my assets with a single broker; is there any way I can transfer the shares I own to another manager? The trick is that each ESP purchase has a 2 year period before I ...
7
votes
2answers
945 views

Employer reported ESPP ordinary income on wrong year's W-2

I sold some Employee Stock Purchase Plan shares on 12/31/2014. As far as I understand, the ordinary income portion of the sale should have been reported on my 2014 Form W-2 from my employer but was ...
6
votes
3answers
22k views

Are companies like EquityZen legitimate and useful?

There are a list of companies claiming to provide liquidation for employees who have ISOs in private startups but don't have the means to exercise them (because of the ridiculous amount of phantom tax ...
6
votes
2answers
347 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 ...
6
votes
4answers
1k views

Deciding between Employee Stock Option and Restricted Stock

The Company I am currently working with, as part of a reward program awarded me 500 stock options and given me an option to choose them either as Employee Stock Option Restricted Stock Or as a ...
6
votes
2answers
853 views

How can I estimate the value of private stock behind employee stock options?

I'm considering an offer with generous options. I have pretty high risk tolerance, so I'm just trying to estimate the expected value of the options. To the extent possible, I want to base this on the ...
6
votes
1answer
2k views

Can capital gains from employee stock options be transfered to a TFSA to avoid taxes?

In a scenario where, for example: An employee exercised a "same-day-buy-and-sell" operation on his employee stock options. He ends up making a profit / gain of $10K. He already has a yearly salary of ...
5
votes
4answers
1k views

Why don't share prices of a company rise every other Friday when the company buys shares for its own employees?

Every second Friday, when an employer gives out paycheques to its employees, some employers also give company shares as part of every paycheque (ESOP). Now, quite a few big employers with many many ...
5
votes
4answers
1k views

Is my employee stock purchase plan a risk free investment?

My company offers an employee stock purchase plan with two 6 month periods. At the end of the period I buy the company stock at a 15% discount on the lower of the price at the start of the period and ...
5
votes
2answers
328 views

What does "cashes in many of his Enron share options" mean?

I'm studying for an organisational subject and I was reading the following paragraph: August 2001 Jeffrey Skilling resigns after just six months; Ken Lay returns to day-to-day management of the ...
5
votes
1answer
244 views

Employee stock option plan with undefined vesting?

As an employee, I have received stock options from my company. However, about vesting, it says only that the board determines it. There is no further info, no vesting period is stated, no further ...
5
votes
2answers
132 views

Can I take money from my employee stock and put it towards another stock?

Can I take money from my employee stock and put it towards another stock?
5
votes
2answers
390 views

What to consider before buying (exercising) a family member's private company employee stock options, about to expire?

My brother-in-law is leaving a private tech company. He has $100,000 in stock options (fully vested) which he must either purchase, or abandon completely upon his exit. This is not a startup — ...
4
votes
2answers
199 views

Is it a wise decision to sell my ESPP stock based on this situation?

My wife lost her job in the middle of 2013 and has been unemployed since then. I have about $7000 of company stock. I am planning to pay my car off using that money but I am not sure if this is the ...
4
votes
1answer
1k views

When Employees are "Granted" Stock Options, is the Company encouraging Long-Term investments from them?

I'm not exactly sure I understand the "why" behind a Company reasoning for offering "options" to their employees to invest in itself. I've found it is very unlikely of the employees to exercise for a ...
4
votes
2answers
157 views

How to flip my options?

I was recently let go from my company due to a reduction in force, and I have received a letter saying I have vested options available for exercising. Although I would like to, I cannot afford to ...
4
votes
5answers
4k views

ESPP advantages and disadvantages

My US employer offers stocks for employees with a certain discount up to a max limit per year. What are the advantages and disadvantages of buying these stocks? Later edit: The employer is Microsoft
4
votes
1answer
871 views

RSU taxation: when am I taxed, and how much?

My company has given me RSUs that will vest this year. I've done some searching on the web and can only find vague information about taxation of these. One site says that they're taxed when they're ...
4
votes
2answers
363 views

Should I accept shares as payment?

My possible future employer offered to pay me in shares of the startup I would join. He dropped sentences like "brutto equals netto" and "We can pay you more in shares than in cash". Obviously there ...
4
votes
1answer
282 views

Proving sale of stock is not short-term

Here is the scenario I am faced. I've transferred DSPP stock from my former employer's stock transfer company (Computershare) to Etrade a few weeks ago. These stocks are from 2010 and 2011. I ...
4
votes
2answers
949 views

Is it best to exercise options shares when they vest, or wait

For my situation, is it better for me to exercise all my option shares whenever they vest (are exercisable), or is there any advantage to waiting? What are the pros and cons? What is the tax aspect, ...
4
votes
1answer
8k views

How does AMT/state taxes work for stock options in California?

I'd like to know how to roughly calculate tax for stock options, for the following fictitious scenario: Suppose Little Susie joined a rare private company in California as a normal employee, and ...
4
votes
1answer
892 views

How do I treat the income from an ESPP I sold now that I am a non-resident alien?

I worked in the US in 2009 and was granted an Employee Stock Purchase Plan (ESPP), which I exercised. Then later I left the US and sold the stock, which is a qualified disposition. Now I am going to ...
4
votes
3answers
2k 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 ...
4
votes
1answer
2k views

Taxes when exercising stock options in a privately held startup

Let's say I currently have the right to exercise some employee stock options (ISO) at a certain strike price. I have add these options for more than a year. I read that the AMT tax applies on the ...
4
votes
3answers
4k views

How a company can afford to give away so many shares as part of its ESOP

As part of an employee share ownership plan (ESOP), the employee(s) get a certain # of shares held in their name. Every month, the employer also matches the contribution and let us assume the employee ...
4
votes
1answer
154 views

Buying non-qualified employee stock options that are going to expire?

I have NQ stock options from my employer that have to be exercised in the next few months before they expire. I would like to hang on to them as I have faith in the stock itself. What are my options? ...
4
votes
1answer
251 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 ...
4
votes
2answers
525 views

Payroll taxes on exercised stock options

The company I work for was recently sold. As part of the buyout, non-qualified stock options held by certain employees were exercised and sold immediately to the buyer. Since multiple employees were ...
4
votes
1answer
607 views

I am a US citizen. Can I gift stock options to my parents in India?

I am a US citizen. Can I gift some stock options to my parents in India? If this is possible, could you point me to a page or document showing all things that needs to be done legally at both US and ...
4
votes
0answers
189 views

Can a company cancel vested employee stock options on acquisition?

My company stock option plan contains the following language: In the event that the company is subject to an Acquisition, outstanding awards acquired under the plan shall be subject to the agreement ...
4
votes
2answers
181 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. ...
3
votes
9answers
604 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 ...
3
votes
2answers
193 views

Non Qualifying Stock Option offered by employer

I currently have an unpaid offer from a tech company, however, they have mentioned the following in the offer letter. Since, I am not aware of stock terminology, if someone can explain to me what this ...
3
votes
2answers
144 views

Equity As Part of Compensation

If a private (one owner) LLC that was recently acquired by a private investment company offers "a grant of employee incentive equity in the company in the form of Class M units representing x.xx% of ...
3
votes
3answers
214 views

What financial due diligence should I do when joining a tech startup?

A large portion of compensation from startups is in the form of equity or stock options (often at the cost of lower salary). It's also not good on your resume (at least early on in your career) to be ...
3
votes
2answers
264 views

Perform exercise-and-hold AND exercise-and-sell-to-cover?

Suppose I was granted 100,000 shares of ISO stock in a startup in the US with a strike price of $1/share and current valuate of $1.25/share. These shares are 100% vested when I leave the company and I ...
3
votes
1answer
108 views

Will I lose the AMT tax I paid if my startup fails?

I recently parted ways with a startup. I was granted options and now must exercise them. When I exercise them, I will incur the Alternative Minimum Tax (AMT). If the company fails and goes bankrupt,...
3
votes
3answers
197 views

Should I exercise my options to buy stock in a company not yet trading publicly?

I used to work for a start up that offered stock options which I haven't been able to afford to exercise until now. I'm very new to stocks so I'm not 100% sure how it works. Currently, I'm able to ...