Double-Trigger RSUs and Stock Options in Private Companies: Key Tax and Other Considerations when Designing and Implementing Award Programs, Strategies to Consider for Expiring Awards, and More

BARBRI

This CLE webinar will provide attorneys with an in-depth analysis of the requirements and considerations involved when designing double trigger restricted stock unit (RSU) and stock option programs for private companies, as well as potential solutions to consider when stock options and double trigger RSUs will expire before the company’s IPO (or other liquidity event).

Description

Double trigger RSUs and stock options are popular forms of equity compensation for private companies, each with advantages and disadvantages that impact private companies and their service providers. Executive compensation and benefits attorneys and other corporate counsel must have a clear understanding of the advantages, disadvantages and risks of each type of award, including the applicable federal tax rules underlying the award structure, when advising clients regarding the design and implementation of equity compensation plans and arrangements that provide for the grant of stock options and double trigger RSUs.

Double trigger RSUs represent a service provider’s contractual right to the delivery of a specified number of shares of stock, or the equivalent cash value, upon the satisfaction of both a continued employment or service requirement and the occurrence of the company's IPO (or other liquidity event) before the occurrence of a specified expiration date. The holder of RSUs has no voting rights (or other rights as a stockholder) until such shares are delivered.

Stock options represent the right to buy shares of stock at a specified price upon the achievement of vesting conditions and prior to the expiration of the option term. Similar to the holder of RSUs, an optionee has no voting rights (or other rights as a stockholder) until the option shares are purchased.

Listen as our panel discusses the challenges of incorporating double-trigger RSUs in compensation plans for private companies, available planning techniques, restrictions under Section 409A, and other critical structuring

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