How early is too early to exercise? If it were possible to exercise pre-vested incentive stock options, imagine the tax savings. One of the big concerns for those facing a wealth event in private company stock is taxes. Timing is everything in exercising stock options. If you manage your company’s equity plan, you need to know about early exercise of Incentive Stock Options.
Whether planned or unplanned, retirement prior to age 65 may present an income gap until the qualifying age to receive pensions and Social Security. While stock administrators cannot offer financial planning advice, they need to know how taxation variables impact executives as they draw down company stock from a variety of accounts and compensation plans. The complexity surrounding stock-based compensation clouds the dilemma: Which funds should be drawn from to optimize the performance and minimize the tax consequences?
It’s not often that the worlds of professional sports and equity compensation intersect. True, I have a Google alert set up for “stock options” that sometimes returns articles about how the stock of football players impacts their career options (as in “Joe Schmo played really well in the last game; his stock is really rising”), but that’s not what I’m referring to. I’m talking about domestic mobility. While we are struggling with how compensation is taxed when employees travel from one state to another, this is an issue that professional sports has been dealing with for a long time now.
As part of its Simplification Initiative, FASB issued ASU 2016-09 on March 30, 2016, an update to ASC Topic 718. For public business entities, the amendments in ASU 2016-09 are effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2017 and interim periods within annual periods beginning after December 15, 2018. There are a few key provisions of the new standard, here we will focus on accounting for income taxes and elimination of APIC pool.
More than 200 public and private companies recently participated in our stock plan administration benchmark survey. From technology providers to healthcare and pharmaceutical companies, there was a wide range of participation across industries and equity plan design. Here is what we found to be true around how teams are spending their time, weaknesses and strengths in regards to technical skills, and a few ideas on how you can improve processes.
During our recent thought leadership webinar, 10b5-1 Survey Results: What do They Tell Us?, Christine Cognetti McCasland, Executive Director within Morgan Stanley’s Corporate Equity Solutions unit, and Mike Andresino, Partner at Posternak Blankstein & Lund LLP, reviewed results from a joint survey conducted by Morgan Stanley and the NASPP. During the presentation, McCasland and Andresino laid out key requirements of a 10b5-1 plan. We’ve recapped them for you.
In mid-November, Glass Lewis released its final proxy voting policies and methodologies for the upcoming year. While most compensation policies remained largely intact from prior years (see our complete summary of compensation and governance policy changes here), this year’s release includes much-needed guidance on Glass Lewis’ approach and requirements for reviewing the use of off-cycle equity grants.
According to the Bank of America Merrill Lynch Workplace Benefits Report, 81% of employers consider their employees’ overall personal financial well-being part of their responsibility. More important than the sense of responsibility employers feel around offering financial wellness tools, perhaps, is the effect on employee behavior and overall satisfaction. The report also found that 76% of employers feel that providing this benefit to employee’s results in a more satisfied workforce and 66% of employers feel offering a financial wellness program fosters a greater sense of loyalty.
As the year winds down, there are a few dos and don’ts that may impact how your participants plan to exercise vested stock options before year-end. In order to make sure employees get the most value out of their equity awards, it may be helpful to provide some considerations for equity compensation planning.
In one of our most watched on-demand webinars, Getting IPO Ready: Preparing Your Strategy and Equity Plan, experts discuss what it takes to gear up for your IPO and outline essential success factors across the finance organization. Preparing for an IPO takes resources, expertise, and coordination across departments, and the best time to begin the preparation process is now! Below you will find seven key areas affected by an IPO as presented by Nicole Irvin, Vice President, Morgan Stanley Investment Banking Division. Irvin provides detailed information about who from your organization should be involved, what key things you need to be thinking about, and what can you do now – even if you are well in advance of an IPO – to start to prepare.