Forms of compensation like r estricted 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.
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.
Employee stock option basics
When employees receive stock option grants,
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