In today’s times, start-up companies and venture-backed firms offering stock grants to employees in lieu of keeping them on-board or as compensation. While it may a befitting opportunity for employees to gain financial returns on a long-term basis, there are also several conditions which the employees are concerned about and that could make their decision somewhat of a hassle. What type of conditions will I have to fulfil before I can exercise the options? Will I be able to get substantial financial returns? Is getting salary and remuneration much better option than going for stock options? What if I am not being able to exercise options due to lack of fund and they expire? What if I have to bear huge tax impacts that make my earning from stocks of no worth? What if the company goes under the hammer and my options become worthless? These are some of the concerns that will definitely raise doubts about accepting stock option grant. Should you accept stock option grant or not?
All the above stated concerns present the employees them with a risky situation, where they keep confused whether they should accept the grant or not. This is definitely a tricky situations and to decide you have to evaluate all the associated aspects to decide whether accepting stock option grant is worth or not. Remember that every company has its own policies and your own financial conditions and requirements are unique to you. So do not compare with others, yet go through a full evaluation on your part. Read the agreement completely, assess what is required of you in terms of conditions to become eligible to exercise the options. Make sure to go through a complete assessment of company’s future growth aspect to ascertain whether you could make a benefit in the future or not. Also see, whether you are looking to stay long term with the company or not. The type of options you’re are presented with, vesting schedule, tax implications and other factors must be taken in consideration in full and must be aligned your future growth projection, financial conditions to make a final decision. Put the full context into your full financial picture and then break-out different conditions associated with the stock options to come to a decision. Also, remember that you should not tie up all of your saving and finances in one investment, and this is one thing that must be considered about the future when you would become eligible or will be ready to exercise the options. For any minor to major concern you have, it will help you to discuss all the prospects and conditions with a financial expert so that you are able to come to a befitting decision.
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