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While I appreciate the intention behind this, and would probably be grateful to have it available from my current employer (or any other employer for whom I've
by rosser 11y ago
While I appreciate the intention behind this, and would probably be grateful to have it available from my current employer (or any other employer for whom I've worked > 2 years), I shudder at the tax implications of exercising options whose strike price is as much as 9 years below the fair-market value.
Hello, AMT...
- jamiequint 11y agoNobody in their right mind would exercise 7-9 years later if they weren't exercising in order to sell, making more than the AMT they would be paying in the process.
- bcherry 11y agoWell yeah, if you had options in a private company that has grown your equity from $20k to $2M over 7 years... you'd find a way to exercise. Surely that company would have demonstrated enough value that your could borrow the money safely or use one of the option-funding schemes to cover the $700K tax bill. But better that than scrounging $20k together when you quit only to see it evaporate.
- walshemj 11y agoWell shouldn't sv employees be lobbying their congressmen and senators for tax breaks for employee share schemes. Take a leaf from Obamas play book set up a group in every company to lobby for this
- zbrock 11y agoThey did that already in the 80s, they're called Incentive Stock Options
- jorde 11y agoIt allows more flexibility and risk profile for employee - and there's no way you can hide from AMT. If you're confident that the company will do well, you might just exercise early if you can scrape up the cash or wait for a long time to determine if it's even worth it (even high profile companies go south). I see it binary: if the company is wildly successful and you have the option to extend exercising to liquid markets, you're not going to care about AMT that much.