Matt Simon
While restricted stock and RSUs are relatively straightforward, they have technical aspects you must understand to make the most of them. Learn the essential facts of restricted stock and RSUs, including basic concepts, vesting schedules, and tax treatment.
Matt Simon
Your company's employee stock purchase plan (ESPP) can be a strong financial benefit. However, the rules and taxation can be tricky. This two-part article presents six topics you must be familiar with to get the most from your ESPP participation. Part 1 covers enrollment, plan types, and offering/purchase periods.
Matt Simon
Restricted stock units (RSUs) have become the most popular alternative to stock options. While RSUs share many of the same issues as restricted stock, there are differences, and it is important to understand the basics of RSUs in their own right.
Beth Walker
Avoid the mistakes others made during prior ups and downs in the stock markets. Common errors arise in nine different situations, including job termination, mergers, financial planning, term expiration, and various life events.
Beth Walker
Avoid the mistakes others made during prior ups and downs in the stock markets. Common errors arise in nine different situations, including job termination, mergers, financial planning, term expiration, and various life events.
Geoffrey M. Zimmerman
Successful strategies for equity compensation begin with identifying the role stock grants will play in your life, whether for retirement, college funding, or other goals. The greater the value of your grants, the more important this process becomes. This article provides helpful checklists of points to consider for three different types of investors.
Matt Simon
TENTH ANNIVERSARY SPECIAL! We at myStockOptions.com have seen a lot of changes since we launched the website back in June 2000. As part of our 10th-anniversary celebrations, this article reviews the top five issues and developments in equity compensation we have witnessed and covered over the past decade. Let's take a break, look back, and have some fun.
Richard Friedman
UPDATED! Get a sense of what you should, and should not, expect in the terms of your stock option grant. This survey of 300 companies looks at trends in vesting schedules, post-termination exercise rules, and other plan features.
Marilyn Renninger
Stock options aren't just for the folks on mahogany row any more. But turning stock options into the real green stuff takes some know-how. You need to know certain features of your grant to decide when to exercise your options and sell the stock.
Kate Victory
UPDATED! How typical are your grants of stock options or restricted stock? Compare their terms and provisions with corporate stock grant data from the NASPP's
Domestic Stock Plan Design Survey.
Kate Victory
UPDATED! It's hard to find comparative data on grants of stock options and restricted stock. The NASPP's Domestic Stock Plan Surveys for 2010 and 2011 include data on grant guidelines, expiration provisions, job termination exercise rules, and M&A.
Richard Friedman
Your company just gave you a stock option grant, or your existing options are underwater. You wonder: "What are my stock options worth? Are they worth anything at all?" Learn about different valuation methods, including Black-Scholes.
W.E.B. Bantling
My clients want to exercise options shortly after they vest for a significant purchase, like a fancy boat or a sports car. The most expensive boat or car I can imagine is the one bought with your just-vested options. Tips I tell clients include not exercising too soon or waiting too long.
Sue Stevens
Morningstar.com
Stock-option fundamentals, including terms, types of options, and basic strategies, along with a checklist of core issues. (Registration is required.)
Russ Banham
Journal of Accountancy
Although stock options are no longer perceived as a quick path to riches, they still can be a powerful wealth-builder.
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Generally, a stock option is a right that a corporation grants...
Restricted stock always has some value to you even when the stock price drops below the price on the date of grant...
Don't confuse restricted securities and restricted stock. They are very different...
An employee stock purchase plan (ESPP) is a type of stock plan that permits employees to use after-tax payroll deductions to acquire shares of their company's stock. Plans can have...
Employee stock purchase plans tend to be viewed as a benefit while stock options are a form of compensation. From an employee perspective, there are some differences in operations, eligibility, and design...
No. The taxation of your stock options depends on whether they are...
Restricted stock shares are issued up front at grant, but you do not own them outright and cannot sell or transfer the shares until the time-based restrictions lapse. With standard restricted stock units the situation is basically similar, while with performance shares your company sets goals that must be met, such as...
SARs, or stock appreciation rights, are contractual rights that entitle you to receive the appreciation from a corresponding number of company shares after the grant date. Instead of exercising a stock option, you...
The useful chart below gives the types of taxes, and when they are triggered, for various forms of equity compensation granted in the United States...
401(k) plans are a type of broad-based, tax-qualified retirement plan funded by pre-tax contributions, unlike...
A company may grant equity awards for a variety of reasons. Surveys show that...
The types and distribution of stock grants are changing, along with the patterns of eligibility. Data from research and surveys can give a sense of how prevalent equity awards are...
At least for senior executives, you can find useful information. You can either go to the...
Limited liability companies (LLCs), which are somewhat similar to S corporations, have membership interests and not stock. Therefore, LLCs cannot offer stock options, restricted stock, direct rights to shares, or an employee stock purchase plan. However, they can give...
If your employer is a for-profit corporation, it probably can offer stock options, restricted stock, or other types of equity compensation to its employees. There may, however, be many reasons why your employer is not offering stock grants...
Almost none, assuming the legal and other technical formalities are followed in creating...
The Employee Retirement Income Security Act (ERISA), whose regulations on tax-qualified retirement plans include rules for employee benefit plans such as 401(k) plans...
A stock plan is a formal document that contains the general rules of operation that are common to all...
Carefully read and comprehend both the stock plan itself and other materials your company gives you or posts on a website. You should look at the following...
Yes. The two main types are nonqualified stock options (NQSOs) and incentive stock options (ISOs). The names indicate their...
Consulting firms have studied the use of stock compensation in both developed and emerging economies. Stock options remain popular, but interest is growing in restricted stock/RSUs and performance shares. Among surveyed countries...
Expensing became mandatory for calendar-year companies several years ago. Because companies take an earnings charge for the "fair value" of stock option grants on their income statements, companies have changed their grant practices by reducing the number of stock options, moving to grant more...
No. Until you exercise a stock option, you do not have the rights of a...
Under SEC Rule 428(b), your company is required to give you the...
A nonqualified stock option, or NQSO, is a type of stock option that does not qualify for...
An incentive stock option (ISO) is a type of stock option that qualifies for special tax treatment...
In general, an ESPP fits into one of three categories: tax-qualified, not tax-qualified, or direct purchase...
Employee stock purchase plans of this type are "qualified" under Section 423 of the Internal Revenue Code. When you enroll in the plan...
A vesting schedule dictates when you may exercise your stock options or when the forfeiture restrictions lapse on restricted stock. A schedule is time-based if you must...
Capital gain is income that arises from the sale of a capital asset. Gain from the sale of securities held for investment, such as shares acquired from stock compensation...
Check your company's stock plan for the allowed methods and procedures. The most common methods involve...
The specific steps vary among companies. You usually first need to make an irrevocable election to exercise...
The tax treatment depends on the type of stock option. This website has detailed content about tax withholding and reporting in the
Tax Center, which includes
annotated examples.
You want to know the term of your grant to prevent valuable stock options from expiring. Most options are granted with a 10-year term, but some have a shorter life, such as...
No. You could lose them in any of the following ways...
Publicly traded stock options (or "call options") listed in newspapers...
Common stock is the form of securities issued to the vast majority of owners of a business corporation, as in an option exercise or ESPP purchase...
Preferred stock is a class of equity securities of a corporation that is given greater rights than common stock...
Many companies allow...
The SEC is, in full, the Securities and Exchange Commission. The SEC is the federal agency...
The largest association devoted to stock-plan drafting, design, and administration...
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Tax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.
Test your knowledge with our Basics Of Stock Grants quiz.
Listen to our new podcast on the basics of stock options.
Restricted Stock 101: Five Essentials Of Restricted Stock & RSUs 
