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.

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Selected Articles

Core Concepts

Financial Literacy With Stock Options, RSUs, And ESPPs: 7 Key Lessons

Few financial endeavors for employees are more complex than making the most of stock options, restricted stock, restricted stock units (RSUs), and employee stock purchase plans (ESPPs). These valuable forms of stock compensation can make a big difference in your life, but they can also be tricky. Pitfalls await the unwary. This article presents seven lessons to sharpen your acumen.
Core Concepts

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

Podcast and video 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

Stock Options 101: The Essentials

Podcast and video included! So your company has granted you stock options. Now what? Stock options give you a potential share in the growth of your company's value without any financial risk to you until you exercise the options and buy shares of the company's stock. Before you exercise your options, their built-in value is subject to pre-tax growth—which can be significant. This article explains the essential facts that you must know to understand your options and make the most of them.
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Core Concepts

ESPPs 101: Key Dates And Terms You Must Know

Employee stock purchase plans (ESPPs) are a great deal. In fact, your ESPP may be one of the best benefits your company offers. Understand the key dates and terms you must know to make the most of your company's ESPP.
Core Concepts

Stock Options And RSUs: 5 Costly Mistakes To Avoid

Stock comp is complex: make no mistake about it. That's easier said than done, however. It's all too easy to make costly mistakes with stock options or restricted stock/RSUs and the related taxes. In this article, experts in stock comp financial planning explain five blunders and how to avoid them.
Benefits

10 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.
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

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

You should know the answers to the questions in this FAQ's checklist and be familiar with the topics presented in the related video. Understanding these will help you to make the most of your stock grants...
Core Concepts

Video included! 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? This is premium content

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

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

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 restricted stock and restricted stock units (RSUs), and how do they differ?

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

Video included! What is an employee stock purchase plan? What are the key facts to know?

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.
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