4 ms·
Grellas: You mention the preference order as: 1) unrestricted grants 2) restricted stock at a cheap price with a timely 83(b) election 3) ISO, with low stri
by stephenbez 11y ago
Grellas:
You mention the preference order as:
1) unrestricted grants
2) restricted stock at a cheap price with a timely 83(b) election
3) ISO, with low strike price and early exercise
4) ISO or NQO without 90 day tail on termination
5) RSUs
How do ISOs with a 90-day tail on termination compare? If I understand correctly, those are the most common.
- grellas 11y agoActually, apologies for being sloppy on this one (in having dashed this off in just a few minutes) - under tax laws, you can't have an ISO without a 90-day tail. This should therefore read "4) NQO without 90 day tail on termination". I would probably put ISO with 90-day tail and no early exercise as #5. It really is a toss-up, though, because the ISO does retain significant tax advantages for anyone who can keep his option exercises out of AMT. I give the NQO (with no tail) the edge here only if AMT becomes a factor, which it does for many people, primarily because it gives you have the flexibility to keep vested options alive long after leaving your employment. Hope this helps.