Basics
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Basics

Basics

Learn core knowledge about stock grants. Browse an overview of this section below, or explore the subtopics to the left. This section covers basic concepts that apply not just to stock options but also to restricted stock and restricted stock units. See also the Tax Center for special sections just on the tax basics of various equity grants.

Want to know more? Listen to our podcasts on the basics of stock options, restricted stock, and ESPPs.

Selected Articles

Core Concepts

Stock Options 101: The Essentials

Podcast included! Your company has granted you stock options. Now what? This article explains the essential facts that you must know to understand your stock options and make the most of them.
Core Concepts

Restricted Stock 101: Five Essentials Of Restricted Stock & RSUs This is premium content

Podcast included! 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.
Core Concepts

ESPPs 101: Key Dates And Terms You Must Know

Podcast included! An employee stock purchase plan is a great benefit. Don't let the opportunity flutter away. Learn the key dates and terms you need to know to make the most of your ESPP.
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Core Concepts

Stock Options Made Simple: Comparing NQSOs And ISOs This is premium content

Stock options rose to fame in the 1990s. Even on the TV sitcom Seinfeld, Elaine got lucrative stock options and couldn't stop talking about them (provoking George's resentment, of course). Options remain a major form of employee equity. This article compares the two types and how they work.
Benefits

Ten Ways Stock Compensation Can Make You Happier

No longer just a subject for philosophers and poets, the pursuit of happiness has become part of the holistic approach to workplace harmony and productivity sought by many companies and their employees. Stock compensation can improve happiness—and it's about more than just recognizing gains.
Benefits

Using Behavioral Finance To Shape Planning For Stock Compensation This is premium content

Emotions can have a powerful impact on financial decisionmaking. The study of behavioral finance, i.e. how people make decisions about investments and other financial matters, can help you to develop a sensible approach to stock compensation and holdings of company stock.
This is simply a selection of the many articles in this section.
Use the navigation to the left to explore all of the categories in this section.

Selected FAQs

Core Concepts

What are the top 10 questions I should ask about my stock grants?

You should know the answers to the following questions. Understanding the topics involved will help you to...
Core Concepts

What is an employee stock option?

Generally, an employee stock option is a right that a corporation grants...
Core Concepts

What is restricted stock? Does it differ from restricted securities?

Don't confuse restricted securities and restricted stock. They are very different...
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Core Concepts

What advantages do restricted stock and RSUs have over stock options? How do the two grant types compare?

It's not easy to determine which type of grant is better for you...
Core Concepts

What types of equity compensation do companies offer?

For a variety of reasons, including those of tax and accounting treatment, compensation policy, and stock plan provisions, employers may offer any of several types of equity-based incentives. These include...
Core Concepts

NEW! In brief, how do nonqualified stock options and incentive stock options differ?

Companies in the United States can grant two types of stock options: nonqualified stock options (NQSOs), the most common type, and incentive stock options (ISOs). The table in this FAQ summarizes and compares the major traits...
Core Concepts

What are the differences between restricted stock and restricted stock units (RSUs)? This is premium content

While restricted stock and RSUs are siblings, they have important differences, as explained by this FAQ, which includes a quick-reference table clearly presenting the comparison...
Core Concepts

Why do companies shift from granting stock options to granting restricted stock units, and then sometimes back again to granting at least some stock options? This is premium content

Surveys indicate that many companies use a variety of grants, including both stock options and restricted stock units (RSUs) in tandem. There are many possible reasons why a company might switch from options to RSUs...
Core Concepts

What is an employee stock purchase plan?

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...
Core Concepts

How does an ESPP differ from a stock option plan?

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...
Exercise

How is my stock option's exercise price set? This is premium content

The full board of directors, the compensation committee, or an executive with expressly delegated authority...
This is simply a selection of the many FAQs in this section.
Use the navigation to the left to explore all of the categories in this section.