News Archive

"Retirement savings can be significantly boosted by equity compensation. When factoring stock options, restricted stock/RSUs, or ESPPs into your retirement planning, you should know the answers to the following questions that apply to you."  MORE >>

"Many employees at companies that just went public or will very soon ... are sitting on valuable appreciated company stock or equity compensation. For some, the liquidity from the initial public offering (IPO) will bring life-altering amounts of wealth.... [This article] features some quick tax rules and tips for employees (and their advisors) beyond the basics ... [along with] a warning about how substantial wealth combined with overly aggressive tax strategies can create a risk of criminal prosecution."  MORE >>

Topics: [1] Should you sell RSU shares at vesting or hold them? [2] Strategies to reduce the tax impact of RSU vesting. [3] Withhold-to-cover vs. sell-to-cover for taxes at RSU vesting. [4] Tools for financial and tax planning with restricted stock and RSUs.  MORE >>

"RSUs, bonuses, and raises can contribute to long-term financial progress, but only when you pair them with intentional planning. High-income earners face a unique combination of high marginal tax rates, variable cash flow, and complex decision-making."  MORE >>

"The SEC Form S-1 filing for the SpaceX IPO provides some insights into the company's stock options, restricted stock units (RSUs), and other forms of employee equity compensation beyond the more extensive details it had to disclose about grants for its executive officers.... This includes the unexpected revelation that for some years the company has had an employee stock purchase plan (ESPP), a rarity among private companies."  MORE >>

"The for-cause termination resulted in the automatic forfeiture of defendant's vested and unvested units under the Incentive Unit Grant Agreement. .... The Court emphasized that courts must examine whether adequate consideration was received at the time the contract was formed and that any subsequent diminishment in the value of the benefit does not negate consideration. Notwithstanding that the value units were 'somewhat contingent' at the time they were awarded, the Court found that value was not 'illusory.' " [North American Fire Ultimate Holdings, LP v. Doorly, No. 142, 2025 (Del. Feb. 3, 2026)]  MORE >>

"Following a checklist is a great way to make sure you get the most out of your restricted stock units (RSUs), manage them effectively, and avoid common mistakes. If you work at a publicly traded company, you can utilize [this] list that includes best practices commonly discussed with clients[.]"  MORE >>

"Receiving equity from a U.S. company if you are not a U.S. citizen or resident alien can raise questions about how and when that equity is taxed in the United States.... One common consideration is whether to file an 83(b) election, a time-sensitive U.S. tax election that can significantly affect how restricted stock or similar property is taxed.... This FAQ outlines when a non-U.S. person may benefit from an 83(b) election, what's required to make one and how the process works."  MORE >>

"Executives often face decisions about when to exercise options, when to sell shares, and how to manage large concentrations of company stock. These choices can affect tax exposure, portfolio diversification, and long-term financial stability. Thoughtful equity compensation planning can help executives evaluate how these benefits fit within a broader financial strategy, including potential opportunities and risks."  MORE >>

"Nonqualified stock options (NQSOs) don't have that many issues, assuming the Form W-2 accurately includes the income from the spread at exercise. At sale, the basis adjustment for ordinary income relating to the stock sold from the NQSO is sometimes missed.... Taxpayers who are unfamiliar with the alternative minimum tax (AMT) might miss the adjustments relating to ISOs.... For AMT reporting, the special beneficial tax rules for ISO don't apply. Instead the spread at exercise is part of AMT income."  MORE >>

"[EO 14372] may require underperforming contractors to implement 'remediation plans' ... and calls for new contract terms restricting stock buybacks and executive compensation paid by some defense contractors.... [T]he EO does not define many of the terms used, raising numerous questions as to the potential scope of its application, as well as the authority for the U.S. Department of Defense/ War to take some of the actions called for in the EO."  MORE >>

"The number of shares you can sell depends on both individual limits and the total level of participation. If you have held the shares for any period before the tender offer and sell the stock at a premium over your company's current internal valuation, the tax treatment for that part of the gain is uncertain.... Advisors often recommend selling shares to diversify. However, the potential downside to selling shares now is that it could take away from much greater gains later in any IPO."  MORE >>

"If the aggregate sales price or amount of securities sold by a company in reliance on Rule 701 during any consecutive 12-month period exceeds $10 million, before the date of sale the company must provide employees with 'enhanced disclosure' ... The new CDIs (271.26 and 271.27) clarify when enhanced disclosure must be provided and the consequence of not doing so."  MORE >>

"[1] Always report stock sales on Form 8949 and Schedule D, even if you sold all the shares immediately after acquiring them.... [2] [T]he cost basis reported by your broker on Form 1099-B is likely to be too low, requiring an adjustment on Form 8949. [3] Watch for the common error of double-reporting stock comp income on Form W-2.... [4] After an exercise/hold of ISOs, always calculate your alternative minimum tax (AMT). [5] If you owe the AMT, remember to use any AMT credit you may have."  MORE >>

"Although often grouped together, RSUs, ISOs and NSOs are taxed differently and create income at different points. Understanding these differences is key to making informed equity compensation decisions."  MORE >>

"From a company perspective, lump sums are operationally simple but hit budgets immediately. Salary continuation spreads costs over time but adds administrative work....For employees with stock options ... [m]ost companies (62%) continue to rely on a 90‑day exercise window.... Nearly a third (28%) offer a tenure‑based approach with longer windows for longer service. Only 10% extend beyond 90 days, even though employees often push for more time."  MORE >>

"[1] You sold any or all of the shares at the time of RSU vesting, option exercise, or ESPP purchase ... [2] You report a stock sale with the unadjusted cost basis shown on Form 1099-B from your broker ... [3] You report W-2 income received from equity compensation ... [4] You exercised incentive stock options and held the shares ... [5] You triggered the AMT from an ISO exercise/hold in an earlier tax year."  MORE >>

"[This article summarizes] the rules related to the year-end reporting requirements for ISO exercises on Form 3921 and ESPP transfers on Form 3922, and the penalties that could apply if a corporation fails to follow these rules."  MORE >>

"Requirement to report ... Electronic delivery requirements ... Format of statement/return ... Unique account numbers ... Electronic submission of IRS returns ... Submission through FIRE ... Submission through IRIS ... Internal Revenue Code penalties for non-compliance ... Disqualifying disposition of ISO shares ... Disposition of ESPP stock."  MORE >>

"[O]ptions-only LTI plans are losing popularity, especially for non-executives. New-hire option-only grants for this group are down 11% since 2024. Refresh grants fell even faster, dropping 14% over the same period.... RSU adoption has been climbing steadily across all employee segments, with the biggest jump in refresh grants for non-executives, up 11% since 2023.... Refresh grants have gotten smaller as companies juggle valuation pressure and the cost of bigger new-hire awards."  MORE >>

"For ISO exercises and ESPP transfers occurring in the 2024 calendar year, employers should file Copy A of the applicable forms with the IRS no later than February 28, 2025, for paper filers (March 31, 2025, for electronic filers). Copy B of the forms should be distributed to affected individuals no later than January 31, 2025."  MORE >>

"[1] Last chance to correct certain Section 409A document failures discovered in 2025.... [2] Nonqualified deferred compensation deferral elections should be made on or before December 31, 2025.... [3] Take certain action to address impact of Tax Cuts and Jobs Act on Section 162(m) of the Code.... [4] Review whether equity-based compensation plans have sufficient shares remaining for 2026 awards.... [5] Review director pay practices and consider separate annual limits on director equity awards.... [6] Review ISS 2026 benchmark policy voting policies for executive compensation matters:.... [7] Section 6039 of the Code information statements due by February 2, 2026.... [8] Continue to consider clawback disclosure issues.... [9] Consider electronic filings for future Section 83(b) elections."  MORE >>

"[The] Internal Revenue Code requires that separate information returns be furnished to most U.S. taxpayers who exercised ISOs during 2025 or who transferred shares during 2025 that were acquired under an ESPP.... The deadline for furnishing Forms 3921 and 3922 to optionees and transferors is February 2, 2026. The deadline for filing Forms 3921 and 3922 with the IRS is March 2, 2026, if you physically mail the form, or March 31, 2026, if you send the form electronically."  MORE >>

"Widespread fears about a stock-price bubble surrounding the AI boom, and a potential market correction, have raised worries for employees with equity compensation. Employee stock options are especially vulnerable ... Concerns about stock markets and investing bubbles can be managed by a carefully developed long-term financial plan for equity compensation and company shares[.]"  MORE >>

"In July 2025, the 'One Big Beautiful Bill' Act of 2025 (OBBBA) made permanent the tax rates of the Tax Cuts & Jobs Act (TCJA) that were set to expire at the end of 2025. However, it also brought some changes that may affect planning for equity comp and company shares at year-end 2025.... [myStockOptions] asked many leading financial advisors, from different regions of the United States, for their ideas on financial and tax planning for the end of this year and the start of the next. [This article provides] their selected responses, presented in their own words."  MORE >>