If options are part of your compensation package, it’s worth your while to get familiar with how they work generally, as well as how your company handles stock options specifically.
Forms of compensation like restricted stock units and performance shares—whereby executives receive a batch of stock from their companies after meeting a performance target—have some key advantages relative to employee stock options.
One way to mitigate the risk of exercising options at precisely the wrong time is to exercise a portion of a grant at a time. Much like dollar-cost averaging into a stock or fund, conducting multiple exercises of multiple lots of options can help ensure that an employee exercises at a variety of price points.
They’re more straightforward than stock options, and the associated taxes are less complex and often better aligned with gains. That said, employee stock options can be a key source of wealth for some households. That means if options are part of your compensation package, it’s worth your while to get familiar with how they work generally, as well as how your company handles stock options specifically.
Read the complete Fast Company article BYÂ Associated Press: https://www.fastcompany.com/91253700/3-things-you-need-to-know-about-employee-stock-options
