Why Is It Important To Understand Your Employee Stock Options?
As an employee of a company whose stock is publicly traded, you may earn benefits not available to other corporate employees. One valuable benefit that may substantially increase your net worth is the stock options you receive from your employer. The choices you make on such issues as the timing of your stock option exercises and whether you should hold or sell the acquired shares can significantly affect your overall financial security. Therefore, it is critical that you understand the potential effects of these decisions before taking action.
What Are The Benefits Of Stock Option Planning?
How to exercise your stock options is not a simple decision. To maximize the potential benefit, you need to consider numerous factors. Stock option planning can:
- Provide a quantified basis for making decisions regarding your stock options by factoring in your specific tax bracket, anticipated values of company stock options and your targeted rate of return on other assets.
- Allow you to coordinate these decisions with respect to your overall financial needs and long-term goals.
- Facilitate wealth management, as company stock options make up a significant portion of your net worth.