negotiate your stock option grant

Why You Should Negotiate Your Stock Option Grant

Stock option grants come hand in hand with working for private, venture backed companies and are often the most lucrative of the incentives offered  – yes even more than catered lunch and cold brew . However, one of the biggest questions faced by prospective new hires is if the equity package on the table is a fair one. Unfortunately, unlike salary information that is democratized through popular websites such as Glassdoor and LinkedIn, there is no public repository of equity grant information to help put the issue in perspective. The next best thing would be to mine stock option databasesRead More

best time exercise isos

Exercise ISOs in January to Save Money

When is the best time to exercise ISOs? ESO experts know the best time to exercise ISOs. Incentive Stock Options (ISOs) are eligible for favored tax treatment which means they are not subject to withholding tax upon exercise like NSOs. However, they are subject to Alternative Minimum Tax (AMT) if the size of your exercise is beyond the exemption limit. Fortunately, AMT isn’t due until you file your tax return the following April. As such, you can maximize the amount of time you get to keep your money Incentive Stock Options (ISOs) are eligible for favored tax treatment by exercising earlyRead More

in the money options

What Happens When Employee Stock Options Expire In-The-Money?

One of the best ways venture-backed start-ups attract and retain great talent nowadays is by offering stock options packages as compensation or as part of their remuneration. This provides a great option for employees by exercising and ultimately selling their options at a higher value than their exercise price. However, it is not as easy as it seems. There is a wide range of factors associated with employee stock options, including the exercise price and vesting. On top of that, your options may expire before you exercise them if you aren’t aware of your expiration date. How Stock Options Expire?Read More

Net Exercising Your Stock Options

Net Exercising Your Stock Options

Net exercising is essentially a  cashless exercise where you tally up the total net value of your stock options based on the number of vested shares multiplied by the spread between the current Fair Market Value (FMV) and your exercise price(s). That total value is then divided by the current FMV to determine how many shares you get to keep. This total value is then taxable to you at ordinary income tax rates. Since your stock isn’t actually liquid yet, the tax obligation from a cashless exercise can be quite burdensome. Private companies rarely offer a cashless exercise feature becauseRead More

tax reform affect stock options

How Will the 2018 Tax Reform Affect Your Stock Options?

How will the Trump-GOP tax reform affect stock options? The 2018 Tax Cut & Jobs Act may have negatively impacted taxes for employees in the top 2 venture-destinations, California and New York, but the overall changes were for the better. Alternative Minimum Tax (AMT) wasn’t eliminated but then again the threat to tax options at vesting instead of exercise didn’t pass either. Qualified Incentive Stock Options (ISOs) ISOs are still subject to AMT, but the following have a significant impact. The exemptions for AMT have been raised to $70,300 for tax payers filing as individuals or $109,400 for those filingRead More