July 2017 - Employee Stock Option Fund

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If you have questions about employee stock options, get your answers today. Scott Chou answers Quora questions such as:

Is it wise to exercise my stock options of a private company on a regular basis or should I wait until I leave the company?

What is the difference between a strike price and option value of stock shares at a startup?

What is the process for exercising ISO's at a private company? How is the spread calculated for my W2?

What is an unvested option?

Do startups have any obligation to notify employees of an impending stock option expiration?

I want to get a loan so I can early exercise all of my stock options upon receiving them in order to avoid the Alternative Minimum Tax (AMT). How do I do this?

Avoid ISO Payroll Taxes

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At a liquidity event such as an M&A, unexercised stock option grants are typically cashed out for a value equal to the spread between the exercise price and the liquidity price per share net to common stockholders. When the company executes such a payout, it is considered a compensation event and subject to payroll taxes. This includes both the employee’s medicare and social security taxes as well as the employer’s matching

Avoid Triggering $100K Limit on an M&A

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If you hold ISOs and your company is acquired, then you may trigger the 100K Limit Rule if your option agreement has an acceleration feature. Suddenly vesting all or more of your unvested options will increase the total number of options you vest for the year. Although your original grant was designed to stay under the 100K Limit, you may suddenly exceed it unintentionally. As a result, some of your ISOs will be [epq-quote align="alig

ESO Fund takes the risk out of exercising stock options