In our June brief we provided additional detail on the 5 Things You Need to Know About Your Employee Stock Options. In this edition, we have included articles and resources to help you get the most out of your company stock and option:

Charitable Giving Strategies for Equity Compensation: Employees with stock based compensation can have large yearly swings in income. This can be caused by the vesting of restricted or performance shares or by exercising stock options. These sometimes uncontrollable events can push you into higher tax brackets. In these situations, deploying charitable giving techniques can be advantageous. This article explains the process and benefits of utilizing Charitable Giving Strategies for Equity Compensation.

WSJ Article: “Playing Your Employee Stock Options”: This recent article in the Wall Street Journal provides some practical information to individuals with employee stock options. It aligns well with the concepts embodied in It advocates making informed decisions for “Spreading the Risk” by diversifying concentrated positions and “Maximizing Option” values by calculating the percentage of “time value” to “intrinsic value” (Insight Ratio). It also introduces hedging strategies for “Protecting the Downside” which requires a general understanding of the Black Scholes method of valuing options.

A Framework for Exercising and Selling Ones Stock Options: This article describes a proven approach for determining when to exercise and sell your employee stock options. It expands on the concept of comparing the percentage of time value to intrinsic value that was referred to in the WSJ article above.

Understanding the Black-Scholes Value of Your Stock Options: You don’t have to be a mathematician to be able to understand the Black Scholes formula and why it is used for valuing employee stock options. This StockOpter white paper is part 1 of a two part series that explains in simple terms what stock option recipients need to know about Black Scholes.

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Understanding your equity compensation is the first step to making profitable and informed decisions. To learn more about your stock and option holdings you can sign up for 2 months of trial access to Don’t hesitate to reach out if we can be of any assistance.

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