Alan B. Ungar
In a growing trend, your company may let you choose between stock options and restricted stock. Which is better for you? Learn techniques to analyze your financial situation and goals so that you can make the right choice.
Alan B. Ungar
As noted in Part 1, many companies are developing employee-choice programs that allow you to choose between stock options and restricted stock. Part 2 provides a method of analysis to help your decision-making.
Bruce Brumberg
Stock appreciation rights, referred to as SARs, will soon start showing up in equity grants at many companies. To help you understand SARs, Part 1 explains the "appreciation," the role of exercises, and taxes at exercise.
Bruce Brumberg and Kate Victory
Your company has awarded you restricted stock. Restricted stock grants carry their own requirements, which you need to understand before you can profit from them. In Part 1 we discuss the rules and restrictions of vesting and sale.
Rich Duprey
Motley Fool
Restricted stock and stock appreciation rights are increasingly popular alternatives to stock options.
Don Durfee
CFO Magazine
Companies may now consider alternatives to grants of time-vested restricted stock, such as performance shares and units. Tying stock awards to performance goals raises new complexities beyond just pleasing shareholders.
Robert Hof
BusinessWeek
If it comes to pass, Google's planned transferable stock option (TSO) program will let its employees sell vested stock options as an alternative to exercising them. This can give employees additional value for the "option" part of their stock options.
Carolyn Said
San Francisco Chronicle
Stock options have fallen from grace at some companies, though they are still part of the entrepreneurial culture in Silicon Valley. The chance to build an ownership stake in your company remains with various types of grants, such as restricted stock and performance shares.
Return to top of this page
Typically, only for-profit corporations are eligible to offer stock options and other stock grants...
For a variety of reasons...
Restricted stock refers to outright grants of company stock to employees or other service providers. It is "restricted" because...
Restricted stock always has some value to you even when the stock price drops below the price on the date of grant...
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...
Stock-based performance plans have targets that, when reached by the end of the measurement period, trigger vesting or payout according to the structure of the plan. Data from varoius surveys show that the most common metrics are...
Starting with the broad grants of RSUs at Microsoft and Amazon, recent corporate practices and survey data suggest it is more likely that your company will grant you...
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...
Stock appreciation rights entitle you to stock (or sometimes cash) that equals the amount...
Much of the stock option content is relevant to SARs. All the key stock option features...
Phantom stock is similar to stock appreciation rights in that you receive...
An employee stock ownership plan (ESOP) is a tax-qualified retirement plan designed to...
401(k) plans are a type of broad-based, tax-qualified retirement plan funded by pre-tax contributions, unlike...
The tax rules of a compensatory stock option are very different from those of an investor warrant...
Your company's flexibility depends on economic conditions, the stage of its development, trends in your industry, and the limitations in the company's stock plans. Any choice offered can depend on whether it is a negotiated grant at hire, an alternative to a cash bonus, or a new approach for your company's equity grants. Employee-choice programs are a nascent trend, with companies such as...
Expensing became mandatory for calendar-year companies at the beginning of 2006. This does not change the tax treatment of your stock option grant. However, because companies take an earnings charge for the "fair value" of stock option grants on their income statements, companies may change their grant practices by reducing the number of stock options, moving to grant more...
A summary of data in surveys from over 10 major consulting and research firms shows that...
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...
Yes. The most popular type of ESPP is known as a Section 423 plan, after the federal tax-code section that sets the requirements for this type of plan. Through an ESPP that qualifies under Internal Revenue Code Section 423, an employee subject to US tax law can...
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...
Receiving deferred stock units, or RSUs that let you delay the delivery of shares (and thus taxes) at vesting, depends on...
Stock options are usually granted with an exercise price equal to the fair market value (FMV) of a share of company stock on the grant date of the option. Once it falls below the FMV they become discounted stock options, which raise multiple issues, including...
Return to top of page
Test your knowledge with our Basics Of Stock Grants quiz.
Listen to our new Podcast on Stock Option Basics.
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.
