From AMT To VCD: A Guide To The Many Abbreviations Of Stock Compensation

Do you know NQSOs from ISOs? AMT from FICA and NIIT? What’s the FMV at option exercise? What's the PTEP if you lose your job? What would happen to your grants in a CIC? Can you sell company stock when you know MNPI? What’s the deal with RSUs, PSUs, ESPPs, and SARs? 

Stock options, restricted stock units, and employee stock purchase plans come with a confusing jumble of acronyms, initialisms, and jargon. Learning these abbreviations is a good way to become familiar with some of the key features and details of stock compensation—and given how long and cumbersome some of the underlying terms are, you’ll soon learn to appreciate their brevity.

This article provides a handy guide, organized by topic.

WYSIWYG: Types Of Grants

SBC: stock-based compensation, pay that involves company stock rather than cash.

ESO: employee stock option, a right that a company awards to purchase a specific number of its shares for a specified price (exercise price) and period (often up to 10 years). Employee stock options are different from listed or exchange-traded options.

NQSO or NSO: nonqualified stock option, the basic and most common type of ESO. NQSOs do not qualify for special tax treatment under the Internal Revenue Code (IRC).

ISO: incentive stock option, the other major type of stock option. An incentive stock option is a type of ESO that qualifies for special tax treatment under the IRC if certain requirements and holding periods are met.

RSU: restricted stock unit, the most common type of equity award nowadays in public companies. A grant of RSUs is a promise to issue you a set number of shares after you’ve met the related vesting conditions, usually a specified length of continued employment or services. Restricted stock awards (RSAs) are similar to RSUs but have a few differences, such as being able to make an 83(b) election to pay taxes on the value of the shares at grant rather than at vesting.

PSU: performance share unit, a grant of shares that vests or pays out based on performance rather than just continued employment. Performance-based grants can be in the form of performance stock awards (PSAs), which are similar to restricted stock, or performance stock units (PSUs), which are similar to RSUs. The most common performance goal metrics are total shareholder return (TSR) and relative total shareholder return (rTSR).

ESPP: employee stock purchase plan, a type of broad-based stock plan that permits employees to use payroll deductions accumulated over a purchase period (e.g. one, three, six, twelve months) to acquire stock from the company, often at a discount or at least without commission.

SAR: stock appreciation right, a contractual right that lets you receive cash or stock equal in value to the appreciation of a specified number of company shares between the grant date and the exercise date. The taxation of SARs is similar to that of NQSOs.

LTI: long-term incentive, a formal name for stock and cash compensation that is earned based on a time horizon, performance goal, or vesting period of more than one year, by contrast with short-term incentives (e.g. an annual cash bonus).

OMG: Taxes

OI: ordinary income. Salary, wages, interest, and types of income taxed at ordinary tax rates. Most forms of stock compensation generate ordinary income, and tax withholding applies.

CG: capital gain, income that arises from the sale of a capital asset, such as the sale of shares acquired from your equity comp. Capital gains and losses may be short-term (held 12 months or less) or long-term (held longer than 12 months). Short-term capital gains (STCG) are taxed at the rates of ordinary income. Long-term capital gains (LTCG) are taxed at 0%, 15%, or 20%, depending on your taxable income during the year.

AMT: alternative minimum tax. The alternative minimum tax system runs parallel to ordinary income tax. Under the AMT system, your alternative minimum taxable income (AMTI) is similar in concept to adjusted gross income (AGI) for ordinary income tax. When you exercise ISOs and hold the shares beyond the calendar year of exercise, the spread is part of your AMTI and you can trigger the AMT, depending on a number of other factors.

FICA: Federal Insurance Contributions Act. Together, Social Security and Medicare taxes are called FICA taxes because they are collected under the authority of the Federal Insurance Contributions Act. You know them from your paycheck and the Form W-2 you use for your tax returns. FICA taxes, also know as the federal payroll taxes, apply when you exercise NQSOs or SARs and at the vesting of restricted stock and RSUs.

FMV: fair market value. The FMV of a company’s stock is used to determine the amount of taxable income to report for an exercise of NQSOs and SARs and for the vesting of restricted stock/RSUs. The FMV is also used to set the exercise price of stock options on the grant date.

IRC: The Internal Revenue Code, possibly the most complex tax system in human history, is the body of legislation that governs all federal taxation in the United States, including the taxes that apply to stock compensation. For example, IRC Section 422 governs the taxation of ISOs, while Section 423 sets the rules for tax-qualified ESPPs.

NIIT: Net Investment Income Tax, a 3.8% Medicare surtax on investment income, such as capital gains and dividends, when your income is over specified threshold amounts. This extra 3.8% tax applies on top of the usual capital gains tax (15% or 20%, depending on income) for taxpayers with yearly modified adjusted gross income (MAGI) of more than $200,000 (more than $250,000 for married joint filers).

FITW: federal income-tax withholding, which applies at the exercise of NQSOs and SARs and the vesting of restricted stock and RSUs.

QSBS: Qualified Small Business Stock. Stock in a startup company that allows you, under certain conditions, to sell shares held more than five years at a 0% capital gains rate. There are detailed rules that determine whether the new company’s stock, and your stock, is QSBS.

SRF: substantial risk of forfeiture, a tax term that applies when rights to compensation are conditioned upon future services (e.g. working X years for a company) or certain targets (e.g. reaching a performance goal or stock price). If the condition is not satisfied, the stock is forfeited. In the context of restricted stock and RSUs, income is not recognized while the stock is still subject to risk of forfeiture (i.e. must vest).

BTW: Other Abbreviations

PTEP: post-termination exercise period, the length of time you have to exercise stock options after your employment at the company ends. This period is almost always shorter than the term that would remain if your employment had continued. It usually lasts 90 days from the termination date, but it can be much less, and if you miss the exercise window you cannot get the options back. See your stock plan and grant agreement for details, including what happens with a leave of absence (LOA).

BSM: Black-Scholes model, a complex mathematical formula used to calculate the theoretical present value of a stock option using variables such as stock price, exercise price, volatility, and expected option term (i.e. the time until exercise). Black-Scholes is the option-valuation model most commonly used in accounting for stock options and in certain financial-planning tools.

CIC: change in control. This denotes a merger or acquisition or other substantial change in shareholder ownership of a company. A change in control can trigger the acceleration of vesting in stock options, restricted stock, and RSUs. The specifics of what constitutes a change in control and its impact are defined in your company’s stock plan documents.

SDS: same-day sale. In this type of option exercise, the immediate sale of the underlying shares from the exercise generates the proceeds to pay the exercise price and any tax withholding. This is also called a cashless exercise.

STC: sell-to-cover. In this type of option exercise you sell just enough of the stock to “cover” the total exercise costs (exercise price + taxes), with the remaining stock held. With restricted stock/RSUs, this applies to selling shares at vesting to cover the tax withholding.

GTC: good-till-canceled order. This is an order to sell stock associated with an exercise when the stock reaches a specific price while the order remains open. To prevent sales of its stock from occurring outside authorized trading windows, some companies do not allow this.

IPO: initial public offering, the process in which a privately held company first offers its shares to the investing public, usually through a registration statement under the securities laws. An IPO is what brings a private company into the stock market as a public company.

SEC: Securities and Exchange Commission, the US federal government agency responsible for the supervision and regulation of the securities industry, the stock markets, securities offerings, and the ongoing disclosure obligations of public companies in the United States. SEC rules and regulations affect many aspects of equity compensation and stock ownership.

MNPI: material nonpublic information, confidential information that will move the company’s stock price (whether up or down) when it is made public. Buying or selling stock when you know material nonpublic information is insider trading, which is illegal, along with insider tipping. To avoid getting into trouble for insider trading, refrain from trading company stock when you know MNPI.

VCD: vesting commencement date, used in some stock plans to note the start of a grant's vesting period.

GTK: Further Resources

Hopefully the wealth your equity comp or ESPP creates will give you lots of WAFF. If you need it (you will), the glossary of stock compensation terms at myStockOptions.com has nearly 1,000 detailed definitions of stock comp terms and phrases. The glossary is also available as a smartphone app: Stock Compensation Glossary, available free from the App Store (Apple devices) and from Google Play. It includes a “term of the day” and a handy quiz.

In addition, our website has an interactive quiz on stock comp abbreviations where you can test your knowledge.

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WEBINAR: Stock Option Exercise Strategies: Managing Risk & Building Wealth (June 15)

The next webinar at the myStockOptions Webinar Channel is coming up on June 15:

Stock Option Exercise Strategies: Managing Risk & Building Wealth
2:00pm to 3:40pm ET (11:00am to 12:40pm PT)

In 100 minutes, three leading financial experts will provide up-to-the-moment practical guidance for stock options in both public and private companies, including real-world case studies. Volatile stock markets and widespread layoffs in the tech industry make the need for effective guidance even more important, as this webinar will cover.

The webinar offers 2.0 CE credits for CFP, CPWA/CIMA, CEP/ECA, CPE (live webinar only), and EA (live webinar only).

After the live webinar, the webinar recording will be available in on-demand format both to registered webinar attendees and to those who later purchase streaming access.

Boost Your Equity Comp Literacy With The myStockOptions Glossary App

When you receive stock options, restricted stock units, or other types of equity compensation from your company, you are plunged into a new world of technical terms and jargon. To make the most of your equity comp and avoid costly mistakes, you need to understand the terminology in your stock plan, grant agreements, company communications, and other documents relating to your awards. It's a matter of "financial literacy" in its most literal form!

Ever since myStockOptions.com went live in 2000, the goal of our website has been to provide education on equity comp for employees, their advisors, and stock plan professionals seeking to further their knowledge. With clear explanations and independent, unbiased expertise, we seek to make you smarter about the basics, financial planning, taxation, and legal issues.

Now the practical expertise of our website has a handy extension in the form of our free app for Apple and Android smartphones: Stock Compensation Glossary. Available from the App Store (for Apple devices) and from Google Play (for Android devices), it's the first and only smartphone app devoted to the often confusing terminology of equity comp and executive comp.

Based on the popular glossary at myStockOptions.com, this searchable reference guide defines almost 1,000 words, phrases, and abbreviations in the areas of equity compensation and executive compensation, along with the related taxation, financial planning, corporate accounting, and securities law.

Clearly written in plain English with a navigation that's easy to use, the app covers terms relating to all types of equity awards, including stock options, restricted stock, RSUs, and ESPPs. In addition:

• The "Term Of The Day" helps users improve their technical vocabulary.
• Recent searches can be quickly recalled.
• Users can test their knowledge with a quiz game right in the app.

Our app is just one of the many innovative multimedia ways in which myStockOptions.com delivers stock plan education for employees who want more than traditional written content:

• Our videos serve as helpful gateways into the website’s detailed educational materials on equity compensation.
• Engaging podcasts cover many topics in equity compensation.
• 18 fun, interactive quizzes let users test their knowledge about all aspects of equity compensation, including restricted stock and restricted stock units, employee stock purchase plans, the rules against insider trading, financial planning, and the impacts of job and life events on equity awards.
• Modeling tools, calculators, and a stock compensation portfolio tracker help stock plan participants and/or their advisors manage equity comp financial planning.

All of the content on myStockOptions.com is ideally suited for licensing by companies and stock plan providers for their stock plan participants.

ICYMI: Test Your Knowledge Of Stock Comp Abbreviations

As if texting shorthand wasn’t confusing enough (IKR?), equity comp comes with an alphabet soup of initialisms and acronyms that can make you go WTF. Do you know NQSOs from ISOs? Your AMT from your FICA and your NIIT? What’s the FMV at option exercise? What’s the deal with RSUs, PSUs, ESPPs, and SARs?

Now you can test your knowledge with our fun interactive quiz on stock comp abbreviations. With a little practice it’s easy to become proficient in them—and BTW, given how long and cumbersome some of the underlying terms are, you’ll soon learn to appreciate them. Moreover, learning these abbreviations is a good way to become familiar some of the key facts and concepts of stock compensation.

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WEBINAR: Restricted Stock & RSU Financial Planning: Insights From Leading Advisors (May 18)

The next webinar at the myStockOptions Webinar Channel is coming up on May 18:

Restricted Stock & RSU Financial Planning: Insights From Leading Advisors
1pm to 2:40pm ET, 10am to 11:40am PT

In 100 minutes, the webinar will feature insights from a panel of three leading financial advisors, including real-world case studies, to provide practical info, guidance, and expertise for restricted stock/RSUs in both public and private companies. They will delve into financial and tax planning to effectively build wealth and prevent expensive mistakes. Volatile stock markets and widespread layoffs in the tech industry make the need for effective guidance even more important, as this webinar will cover.

The webinar offers 2.0 CE credits for CFP, CPWA/CIMA, CEP, CPE (live webinar only), and EA (live webinar only).

After the live webinar, the webinar recording will be available in on-demand format both to registered webinar attendees and to those who later purchase streaming access.

Financial Literacy With Stock Options, RSUs, And ESPPs: 7 Key Lessons

Financial literacy is all the rage now. In fact, April was National Financial Literacy Month! With the growing complexity of many financial instruments, financial literacy is more important than ever.

For most employees, few financial endeavors are more complex than understanding stock options, restricted stock, restricted stock units (RSUs), employee stock purchase plans (ESPPs), and other forms of stock compensation. These valuable forms of compensation can make a big difference in achieving both short-term and long-term life goals, such as boosting cash flow, funding college, buying a house, or saving for retirement. But they can also be tricky. Pitfalls await the unwary.

Below are seven ways you can improve your fluency with stock compensation. Before you start, be sure you gather and review all of your stock-plan-related documents, including the grant agreement, the grant notice, the stock plan itself, and any company communications about these.

1. Set Goals

All financial planning starts with setting goals. What do you want to do with the proceeds from the eventual sale of shares acquired from stock options, restricted stock/RSUs, or an ESPP?

Having a purpose motivates you to improve your financial literacy. A clear understanding of how stock comp fits into your life will strengthen your incentive to understand all the complicated details.

Coming up with concrete goals will also help to clarify your use of the shares in relation to your salary, cash bonus, and 401(k) holdings and other savings.

2. Know What Type Of Equity Award(s) You Have

Many financial advisors I’ve spoken with have clients who initially tell them they have stock options when it turns out they have restricted stock units—which work very differently. While in popular parlance stock options has become a generic term for all types of equity compensation, you need to know the difference between actual stock options and other grant types.

Employee stock options give you the right to purchase a specified number of shares of the company’s stock at a fixed price during a rigidly defined timeframe.

Alert: Know your company’s procedures for accepting grants and exercising options. Exercise often involves a third-party website, such as that of the broker it designates.

Companies can grant two types of options: nonqualified stock options (NQSOs), the more common variety, and incentive stock options (ISOs). Before exploring the differences between NQSOs and ISOs, you must check your grant notice to know which type of options you have. ISOs have tax advantages and complexities, as explained in #3 below.

Restricted stock and restricted stock units (RSUs) are grants of company stock that you get outright once they vest. Usually, you don’t pay anything for shares granted by a public company.

Restricted stock and RSUs differ in a few ways. Restricted stock is issued at the time of grant and is held in escrow. You can’t sell or otherwise transfer the stock until vesting occurs. By contrast, RSUs are technically an unfunded promise to issue you shares when the vesting period has been satisfied. The shares are then “delivered” to you. RSUs are simpler for companies to administer, and in public companies RSU grants are much more common than grants of restricted stock.

3. Understand The Core Tax Treatment

With nonqualified stock options, at the time of option exercise you pay withholding taxes (federal income tax, any state income tax, Social Security up to the yearly maximum, Medicare). After that, any gains above stock price at exercise (i.e. your cost basis) follow the capital gains tax rules.

Incentive stock options qualify for special tax treatment under the Internal Revenue Code. You do not have any Social Security or Medicare tax and no income tax withholding, even if you sell the shares immediately.

Should you decide to hold ISO shares for more than two years from the date of grant and one year from the date of exercise, all appreciation over the exercise price is taxed at the lower long-term capital gains rates (i.e. none of the gain is taxed at ordinary income rates). However, the exercise spread on shares acquired from ISOs and held beyond the calendar year of exercise can subject you to the alternative minimum tax (AMT) and additional tax-return reporting.

Alert: You should consult a qualified financial or tax advisor do an AMT calculation whenever you hold the ISOs shares at exercise. Do it again at calendar year-end to decide whether to sell the shares to avoid the AMT.

With RSUs, you pay taxes through withholding on the income recognized at vesting (federal income tax, any state income tax, Social Security up to the yearly maximum, Medicare). When you sell the shares, any gain or loss above the compensation income you recognized (i.e. your cost basis) is taxed under the capital gains rules.

Alert: Compare the withholding rates your company uses for your stock compensation income to your marginal tax rate. If the withholding rate is lower and thus won’t cover all the taxes you owe, consider putting money aside to pay the taxes with your tax return or the need to pay estimated taxes.

OI = ordinary income tax (income and any withholding reported on Form W-2)
CG = capital gains tax (reporting on Form 8949 and Schedule D of tax return, even for capital losses or just commissions/fees)
AMT = alternative minimum tax
FICA = Social Security up to yearly maximum, plus Medicare
* Depends on when shares are sold, and on the price at sale relative to the price at exercise/purchase.
** Assumes shares are delivered at vesting and not deferred. With proper deferral, OI is delayed until later.

4. Identify The Vesting Schedule Of Stock Options, Restricted Stock, And RSUs

The vesting schedule of your grant dictates when you may exercise stock options, when forfeiture restrictions lapse on restricted stock, or when shares are delivered with RSUs in the standard public company equity awards.

Alert: Each grant you receive has its own vesting schedule and other terms.

Vesting is usually based on continuing to provide services for the company over a specified period. A grant can be designed to vest all at once (e.g. after four years) or in pieces, called tranches (e.g. 20% of the grant every year for five years, or 25% of the grant the first year and monthly after that). Especially for executives, the vesting schedule can also or instead be performance-based (e.g. tied to company-specific or stock-market targets, such as total shareholder return).

Once stock options have vested, you can exercise them—but you don’t have forever to do so. Stock options have a fixed term, usually ten years. At the end of the option term, any unexercised stock options expire and you have no way to get them back. Therefore, if your options have a ten-year term and are fully vested after four years, you will have six years during which to exercise them, assuming you keep working for the company (you will have less time to exercise options after job termination, as explained in #6 below).

5. Learn How Your ESPP Works

Employee stock purchase plans (ESPPs) are a type of stock-related company benefit in which your company deducts money from your paycheck to buy shares of its stock, often at a discount. ESPPs have their own key dates and rules to know, especially regarding enrollment to participate in the plan and how to change your contributions. During an ESPP purchase period, payroll deductions are accumulated. Shares are typically bought on the purchase date at the end of the period.

Alert: If your company has an ESPP, it can be a great deal. It’s vital that you know how and when to enroll and to later make any changes you may want.

There are two types of ESPPs: tax-qualified and nonqualified.

Tax-qualified ESPPs (also called Section 423 ESPPs for the tax-code section that sets the rules) let you buy shares at a specified discount of up to 15% from the stock price. Some companies use a lookback provision that bases the discount calculation on the stock price at either the start of the offering or end of the purchase period, whichever is lower. The IRS lets you buy up to $25,000 in shares during any calendar year, based on the price at the start of the offering, though your company may impose a lower limit.

You have no Social Security or Medicare tax and no income tax withholding at all. The sale (not the purchase) triggers taxes. If you hold the shares long enough to meet the holding periods (more than one year from purchase and two years from enrollment) for favorable tax treatment, most of your gain is taxed as long-term capital gain when you sell the shares.

Nonqualified ESPPs work in the same way but without the IRS rules and favorable tax treatment of qualified plans. A discounted price or contribution match (if any) produces ordinary income at purchase.

OI = ordinary income tax (income and any withholding reported on Form W-2)
CG = capital gains tax (reporting on Form 8949 and Schedule D of tax return, even for capital losses or just commissions/fees)
FICA = Social Security up to yearly maximum, plus Medicare
* Depends on when shares are sold, and on the price at sale relative to the price at purchase

6. Study What Will Happen If You Lose Your Job

Read your stock plan documents and your grant agreement carefully to know your rights if you are fired or if you quit, work for a competitor, retire, become disabled, or die. Make sure you, as well as your family or close friends, are aware of these rights.

With stock options, many plans give you no more than 90 days to exercise vested options after job termination, though the post-termination exercise period can be longer for certain life situations. However, you may lose vested options immediately if you leave the company to work for a direct competitor.

With restricted stock and RSUs, job termination almost always stops vesting and causes the forfeiture of unvested grants—you lose shares that have not yet vested. You keep any shares that vested before your termination date.

Exceptions can occur to accelerate vesting or let it continue, depending on the terms of your grant agreement or stock plan, such as special provisions for disability or death, for retirement, or for a change in corporate control (e.g. a merger or acquisition), or in a broad layoff.

Alert: If you are planning to leave your job soon, you may want to stick around long enough to get any valuable equity grants that may vest in the near future.

For more details on this topic, see my Forbes.com article Protect Your Stock Options And RSUs In Job Loss: 3 Key Actions.

7. Keep A Stock Comp Checklist

One good way to start with your stock compensation is to be sure you know the answers to the questions in a checklist you prepare. Questions on it may include:

1. What is the vesting period of stock options or restricted stock/RSUs?

2. How do I enroll in my company’s ESPP and make any changes in contribution amounts?

3.  With stock options, how long do I have before the grant expires?

4. What would happen to my grant if I were to leave or lose my job, die, become disabled, or retire? How do these events affect vesting and the forfeiture of the grant?

5. What are my goals for the income that I will receive from my stock compensation and/or ESPP? Do I want to use the gains for near-term goals (e.g. college tuition, downpayment for a house purchase) or for long-term goals (e.g. retirement)?

myStockOptions.com can help you with all aspects of stock compensation and ESPPs, from the basics to tax reporting and financial-planning strategies. Our resources include calculators and modeling tools, videos, and interactive quizzes to test your financial fluency with stock options, restricted stock/RSUs, and ESPPs. If you want personal guidance, seek the counsel of a qualified financial or tax advisor.

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WEBINAR: Stock Comp Bootcamp For Financial Advisors (May 3)

The next webinar at the myStockOptions Webinar Channel is coming up on May 3: Stock Comp Bootcamp For Financial Advisors (1pm to 2:40pm ET, 10am to 11:40am PT). Whether you are new to stock comp or want to sharpen your knowledge, this webinar will provide practical info and insights to maximize your success. All the essential topics will be presented in 100 lively minutes by Bruce Brumberg, the editor-in-chief and co-founder of myStockOptions and a Forbes contributor.

The webinar offers 2.0 CE credits for CFP, CPWA/CIMA, CEP, CPE (live webinar only), and EA (live webinar only).

After the live webinar, the webinar recording will be available in on-demand format both to registered webinar attendees and to those who later purchase streaming access.

CFPs, CEPs, And Others Can Now Get All Or Most Of Their CE Credits In myStockOptions Learning Center

Need CE credits? Wish you had a single easy place to get them?

Wish granted!

myStockOptions.com has expanded the valuable offerings in its Learning Center, a convenient resource that offers required continuing education (CE) credits for Certified Financial Planners (CFPs), Certified Equity Professionals (CEPs), Certified Private Wealth Advisors (CPWAs), and Certified Investment Management Analysts (CIMAs).

Our eagerly awaited new course on equity compensation at private and pre-IPO companies builds on the previously established programs about financial planning, taxation, stock options, restricted stock and restricted stock units, employee stock purchase plans, and SEC law.

New Course: Private & Pre-IPO Company Stock Compensation

The new course, Private & Pre-IPO Company Stock Compensation, is a timely addition in an age of huge demand for knowledge and resources in the complex realm of startup and private company equity compensation. Private companies have been growing fast over the past few years while granting increasing amounts of equity to their employees, whether via stock options or restricted stock units. Furthermore, the record number of initial public offerings (IPOs) and M&A deals in 2021 put a spotlight on the complex financial planning for equity comp and company shares that employees and their advisors need to know when a private company goes public or gets acquired.

myStockOptions Learning Center For Continuing Professional Education

The Learning Center at myStockOptions is a crucial resource for financial advisors and stock plan professionals who need to keep up their required continuing education on equity comp and earn the CE credits required to maintain their certifications. The eight courses in the myStockOptions Learning Center, each with a 30-question exam, now offer:

• 40 CE credits for CEP (over 100% of the total requirement)
• 26 CE credits for CFP (87% of the total requirement)
• 26 CE credits for CPWA/CIMA (65% of the total requirement)

Our CE courses not only demonstrate the practical expertise and excellence of our resources on equity comp. They add significant value to memberships at our websites, which have a big following among financial advisors, stock comp professionals, and stock plan participants. These are engaging online self-study programs that busy professionals can take at their convenience to obtain necessary CE credits.

The eight online self-study courses and exams:

• NEW! Private & Pre-IPO Company Stock Compensation
  5 CEP credits, 5 CFP credits, 5 CPWA/CIMA credits
• NEW! Taxation & Tax Reporting
  5 CEP credits, 3 CFP credits, 3 CPWA/CIMA credits
• Restricted Stock, RSUs, and Performance Shares
  5 CEP credits, 3 CFP credits, 3 CPWA/CIMA credits
• Nonqualified Stock Options
  5 CEP credits, 3 CFP credits, 3 CPWA/CIMA credits
• Incentive Stock Options
  5 CEP credits, 3 CFP credits, 3 CPWA/CIMA credits
• Employee Stock Purchase Plans
  5 CEP credits, 3 CFP credits, 3 CPWA/CIMA credits
• Financial Planning with Stock Compensation
  5 CEP credits, 3 CFP credits, 3 CPWA/CIMA credits
• SEC Law & Insider Trading
  5 CEP credits, 3 CFP credits, 3 CPWA/CIMA credits

Each course features articles, FAQs, podcasts, and videos from myStockOptions.com. They are woven into a dynamic, interactive learning tool that teaches the topics in a memorable way. The answer key for each 30-question exam also links to relevant content on the site for further reading and learning.

The value of our CE courses as efficient educational tools has also led some major financial institutions to use our Learning Center for internal training and their in-house certification programs.

Along with the Learning Center, the myStockOptions Webinar Channel also offers continuing education for the CFP, CEP, CPWA/CIMA, and EA certifications in its array of live and on-demand webinars.

Restricted Stock & RSUs: Top 10 Questions To Ask To Make The Most Of Your Grant

From Apple, Amazon, Microsoft, or Tesla to new IPO companies, grants of restricted stock or restricted stock units (RSUs) are now more common than grants of stock options at public companies. Whether you consult a financial advisor or do your own tax and financial planning, you need to understand some core issues with these grants to build wealth and prevent costly mistakes.

From my experience with the stock plan participants and financial planners who use myStockOptions.com, answering the questions in the checklist below is a good way to start making the most of restricted stock/RSU grants.

1. Do I have a grant of restricted stock or a grant of restricted stock units? What are the key differences?

2. Is formal acceptance of the grant required? What happens if I don't accept the grant before vesting?

3. What is the vesting schedule?

4. Is vesting based on duration of employment or on performance goals?

5. What would happen to the vesting of my grant if I were to leave or lose my job, die, become disabled, or retire?

6. When the shares vest, what account will they appear in?

7. Does the company offer a choice for the tax withholding, or does it hold back shares to pay the taxes?

8. With RSUs, can I defer the delivery of the shares at vesting?

9. If my company pays dividends to shareholders, will I get dividends on my restricted stock? If so, when? What if I have a grant of RSUs instead?

10. What would happen to my restricted stock in a corporate acquisition or merger?

If you don't know the answers to some of these questions, look at the stock grant agreement, the stock plan, and any employment agreement. You may want to double-check those documents in any case just to confirm the facts and detect any inconsistencies. When the answers in the documents are unclear or raise new questions, ask your company’s stock plan administrator or the appropriate contact in the HR department.

Tax Treatment In A Public Company

In addition, you should understand the key aspects of the standard tax treatment:

• Your taxable income is the market value of the stock when the restrictions lapse (or at grant with an 83(b) election for restricted stock), minus any amount paid for the shares.
• You have compensation income that is subject to ordinary income tax, Social Security, Medicare, and any state and local tax.
• The income is subject to mandatory supplemental wage withholding, which for US income taxes is a flat rate.
• The amounts of taxable income and the taxes withheld are included in the corresponding boxes of the your Form W-2.
• The capital gains holding period starts the day after vesting/share delivery (or at grant with an 83(b) election for restricted stock). You have tax return reporting on Form 8949 and Schedule D for the stock sale even if you flip the shares immediately at vesting.

Private And Pre-IPO Companies

With early-exercise stock options in a private company, you receive restricted stock at exercise (not RSUs) that follows the same vesting as the original stock option grant. These same rules above apply. However, the Section 83(b) election needs to be within 30 days of exercise, with the taxable income being the spread at exercise.

Some larger pre-IPO companies also grant RSUs that have double-trigger vesting. The first vesting condition is met when you work at the company for the required period. The second condition, which then vests the shares, is when a liquidity event occurs for your company, such as an IPO or acquisition.

You want to carefully check your stock plan documents to see how soon after the liquidity event the second vesting trigger occurs, as this is when you’ll have a big income hit, and whether the company has the flexibility to change it (e.g. from the end of the lockup to the IPO date). You want to add this to your RSU question list when you work at a private company. Also ask whether the company’s RSU grant qualifies for the five-year tax deferral election in the new tax code Section 83(i).

Quizzes To Test Your Knowledge Of These Stock Grants

You can your knowledge of restricted stock units and restricted stock with two fun, free interactive quizzes on myStockOptions.com:

• Restricted Stock Units (RSUs)
• Restricted Stock, RSUs, Performance Shares

Stock Comp Bootcamp For Financial Advisors Will Get Their Knowledge In Tip-Top Shape

What do you call a bootcamp about stock compensation? A "Bootcomp"? Maybe. Whatever the case, myStockOptions is holding a bootcamp on stock comp in a special webinar on October 21, presented by myStockOptions editor-in-chief Bruce Brumberg, Esq.

While nobody will actually have to drop and give us twenty pushups (though they are welcome to do so if they want), our bootcamp is a great opportunity for financial advisors, lawyers, CFAs, and tax professionals to learn all they need to know about stock comp or sharpen their existing knowledge in just 100 lively minutes. This webinar is yet another educational offering from myStockOptions in addition to the self-study courses and exams in the website's Learning Center, which offers a multitude of continuing education credits for CFP, CEP, CPWA, and CIMA professionals.

Bootcamp details are below and at the webinar registration page.

For financial advisors in particular, stock compensation is a complex planning niche they must understand when their clients have grants of stock options, restricted stock, restricted stock units, or employee stock purchase plans. Command of the core topics is required to better serve clients, build wealth, and prevent costly mistakes.

"You will understand the fundamentals of stock comp with our bootcamp webinar," guarantees Bruce, a respected expert on equity comp with over 20 years of experience in stock comp education, communications, and training. "We are very confident in the power of this educational event. If you don't feel you're in top stock comp shape after our webinar, as part of our bootcamp guarantee I will provide you with a private tutoring session myself."

All the essential topics below will be presented in just 100 minutes by Bruce Brumberg, the editor-in-chief and co-founder of myStockOptions.

• Stock options: 8 core features
• Exercise methods
• 4 key features of nonqualified stock options (NQSOs)
• NQSO taxation: 5 core rules
• 3 special features of incentive stock options (ISOs)
• ISO taxes: 5 key points
• ISOs compared to NQSOs and what’s better for your clients
• Stock options compared to restricted stock/RSUs: what’s better for your clients
• Restricted stock & RSUs: 7 key features
• 10 tax rules for restricted stock/RSUs
• How restricted stock & RSUs differ
• 6 features of employee stock purchase plans (ESPPs)
• 10 ESPP terms to know
• Types of ESPPs and their special benefits
• 5 tax rules for ESPPs
• Key decisions to make with restricted stock/RSUs, stock options, and ESPPs
• Difference between private and public company stock grants, including taxes
• Checklist of questions to ask clients with stock comp and info to gather

The webinar will offer 2.0 CE credit hours for:

• Certified Financial Planners (CFPs)
• Certified Equity Professionals (CEPs)
• CPWA and CIMA certifications from the Investments and Wealth Institute

Registration for this special webinar is now open.

Restricted Stock, Restricted Stock Units, And Restricted Securities: How To Tell Them Apart And Avoid Confusion

Restricted stock and restricted stock units (RSUs) are now the most popular type of equity compensation. RSUs in particular are the most frequently granted equity awards in public companies. Restricted stock/RSUs may be granted instead of or in combination with stock options, which continue to be a major type of equity award but have declined somewhat over the past decade.

However, we continue to see companies, employees, and financial advisors inaccurately call RSUs "restricted stock" or even "restricted securities." That lax terminology can be problematic and confusing. Those three things are not the same—and the differences matter. As a lawsuit by current and former Uber employees shows, it is important to know what type of stock grant you have and its tax treatment. In this article we explain the important differences between restricted stock, RSUs, and restricted securities.

Unidentical Twins

Restricted stock, along with its nearly identical twin restricted stock units (RSUs), is a direct grant of company stock, as opposed to an option to purchase stock (as in stock options). The stock is "restricted" because it is subject to a vesting schedule, which can be based on time worked at the company after grant and/or on specified performance goals.

Restricted stock and RSUs used to be granted only to key employees and executives or as a replacement stock grant when you were leaving behind valuable stock options at another company. For a long time, stock options were the grant of choice for rank-and-file employees and managers.

However, stock options have become somewhat tarnished by changes in their accounting, concerns about shareholder dilution, option-backdating scandals, and the vast number of underwater options employees were stuck with from past economic downturns. As a result, many companies now grant restricted stock and RSUs more broadly to employees and managers, either in place of stock options or in combination with them.

Both restricted stock and RSUs are considered “full value” grants. This means that you receive the entire value and ownership of each share when it vests.

Example: You received a grant of restricted stock for 1,000 shares. At vesting the stock price is $15. You now have company stock valued at $15,000.

The table below shows key differences between restricted stock and restricted stock units, including their taxation.

	Restricted stock	RSUs
Time of share issue	Grant (held in escrow)	Vesting or delivery
Voting rights?	Yes	Not until after shares are delivered to you
83(b) election available?	Yes	No
Social Security and Medicare taxes	At vesting	At vesting
Income tax (in the United States*)	At vesting	At share delivery
Deferral available?	No	Yes, with a proper 409A election
Dividend rights?	Yes	No, but company plan may provide dividend equivalents

* For the tax treatment of restricted stock and RSUs in other countries, see the Global Tax Guide at myStockOptions.

Explaining The Differences

The principal traits of restricted stock include the following:

• At grant, restrictions on sale and the substantial risk of forfeiture exist until you meet vesting goals of employment length or performance targets.
• Normally, the grant vests in increments over several years (graded vesting); but it can instead vest all at once (cliff vesting).
• During the restricted period (i.e. the vesting period), dividends are usually paid, and grant-holders have voting rights, like shareholders.
• Under Section 83(b) of the tax code, you can elect to be taxed on the value at grant rather than on the value at vesting—a tax flexibility that is not available with RSUs. This election allows you to pay tax on the lower value at grant, and not at vesting when you’re confident the stock price will be higher, and also start the capital gains holding period earlier. To make the election, you need to file it with the IRS within 30 days of the grant.
• Some private companies grant early-exercise stock options that are immediately exercisable into restricted stock with its own vesting schedule.

Restricted stock units have many similarities, including that both represent compensation equal to the value of a share of stock. But important differences exist:

• With RSUs, the stock itself is not issued or outstanding until the actual release of the shares at vesting. Before then, RSUs are essentially a bookkeeping entry—technically an unfunded promise to issue a specific number of shares (or a cash payment) at a future time once vesting conditions have been satisfied. For various reasons, RSUs are now more commonly used than restricted stock, including that they are easier for your company to administer. Stock-settled RSUs are much more common than cash-settled RSUs.
• Under most RSU plans, such as RSU grants made by Amazon, Microsoft, Apple, and Intel, the delivery of shares occurs at vesting. These plans are similar in concept to standard time-vested restricted stock.
• A small number of companies have RSU plans with a tax-deferral feature that lets you select a later date for share delivery, which also delays the income tax. Alternatively, the company can specify a date for deferred delivery (e.g. retirement).
• Larger private companies tend to grant RSUs that require an additional vesting condition of a liquidity event, such as its acquisition or IPO.
• Holders of unvested RSUs have no shareholder voting rights and, depending on the plan details, may or may not receive dividend equivalents. Ask your company if you’re not certain about whether and when it pays dividend equivalents on its RSUs.

Restricted Securities

Restricted securities are shares that are not registered with the SEC, such as shares in a private company. They have a formal definition under the US securities laws. When you work for a startup or fast-growing private company that hopes to get acquired or go public, the shares you receive from your restricted stock or RSU grants are also restricted securities. The stock investors buy in a private company are also restricted securities.

The "restrictions" in restricted securities, such as the special resale holding periods under the SEC rules, come from the securities laws, whereas the vesting restrictions in restricted stock come from your company. Restricted securities are resold under SEC Rule 144 or another SEC registration exemption, until registered with the SEC in an IPO.

When the shares are owned by a senior executive or director (i.e. an affiliate), they are also called control stock, even when acquired from an open-market purchase or from stock compensation. Technically, the phrase "restricted shares" also refers to restricted securities, though some companies confusingly use “restricted shares” to mean restricted stock grants.

When you acquire restricted securities, the stock certificate will have a legend stamp indicating that the shares are restricted and therefore cannot be resold unless they are registered with the SEC or unless an exemption applies. This legend will need to be removed before you can resell the stock.

Ready For A Quiz?

Test your knowledge of restricted stock units and restricted stock with two free interactive quizzes on myStockOptions:

• Restricted Stock Units (RSUs)
• Restricted Stock, RSUs, Performance Shares

No Conferences, No Problem: Online CE Courses Expanded At myStockOptions

While states are finally starting to reopen after the pandemic shutdowns, the return of traditional conferences, seminars, and chapter meetings for equity comp pros and financial advisors are still a long way off. If you need continuing education (CE) credits for your professional certifications, online courses and events are the way to go for the foreseeable future.

myStockOptions.com is there for you. We have expanded the valuable offerings in our Learning Center, which offers CE credits for:

• Certified Equity Professionals (CEPs)
• Certified Financial Planners (CFPs)
• Certified Private Wealth Advisors (CPWAs)
• Certified Investment Management Analysts (CIMAs)

A new course and exam on taxation and tax reporting for equity compensation builds on the previously established programs about financial planning, stock options, restricted stock/RSUs, employee stock purchase plans, and SEC law.

CEPs Can Get All Of Their CE Credits, CFPs Most Of Them

The programs in the myStockOptions Learning Center now offer:

• 35 continuing education credits for CEPs (over 100% of the total requirement)

• 18 continuing education credits for CFPs (60% of the total requirement)

• 18 continuing education credits for CPWAs and CIMAs (45% of the total requirement)

The Learning Center offers engaging online self-study programs that busy professionals can take at their convenience to obtain necessary CE credits. Each course features podcasts, articles, FAQs, and videos from myStockOptions.com. They are woven into a dynamic, interactive learning tool that teaches the topics in a memorable way. The answer key for each exam also links to relevant content on the site for further reading and learning.

The Learning Center now has seven separate online self-study courses and exams:

• Taxation & Tax Reporting: Course of Study and Exam

• Financial Planning with Stock Compensation: Course of Study and Exam

• Restricted Stock, RSUs, and Performance Shares: Course of Study and Exam

• Nonqualified Stock Options: Course of Study and Exam

• Employee Stock Purchase Plans: Course of Study and Exam

• Basics of SEC Law: Course of Study and Exam

• Incentive Stock Options: Course of Study and Exam (not available for CFP credit)

Our CE courses add a lot of value to the content at myStockOptions.com, which has a big following among financial advisors, stock comp professionals, and stock plan participants. The value of our CE courses as efficient educational tools has also led some major financial institutions to use our Learning Center for internal training and their in-house certification programs.

CPE For Certified Public Accountants (CPAs)

Many states have a process for CPAs to self-determine whether a program qualifies as acceptable continuing education. For example, Massachusetts, which does not have a registration requirement for CPE programs, allows CPAs to self-determine and self-report their continuing education activities. CPAs are encouraged to take our courses and exams and determine whether they comply with their states' rules for CPE credits. (myStockOptions.com is not registered with NASBA or any state boards of accountancy.)

CE For CFA Charterholders

Chartered Financial Analysts (CFAs) are encouraged to take our courses and exams and include them when they self-document their continuing professional development in the online CE tracker on the CFA Institute website.

More CE At myNQDC.com

A sibling website of myStockOptions.com, myNQDC.com is the leading online resource of educational content on nonqualified deferred compensation (NQDC) for both NQDC professionals and NQDC plan participants. The continuing education programs in the website's Learning Center focus on two areas of nonqualified deferred compensation: Basics & Taxes and Enrollment & Distribution. Each program offers a comprehensive course of educational content and a rigorous 30-question exam. To take the exam, professionals must certify that they have read the content. They can earn credits only by achieving a passing score in the exam.

The courses and exams at myNQDC.com offer:

• 6 Professional Achievement in Continuing Education (PACE) credit hours for Chartered Life Underwriters and for Chartered Financial Consultants

• 12 Continuing Professional Education (CPE) hours for credentialed members of The American Society of Pension Professionals & Actuaries
• 6 CE credits for CFPs

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Alert: If you haven't yet seen the popular Forbes blog of our editor-in-chief Bruce Brumberg, you can catch up at the link and see what we've been up to during the pandemic vacation.

Equity Comp Survival Guide For Pandemic Times

The COVID-19 pandemic has affected everyone, including employees with equity compensation.

• You may need to sell company stock for cash to meet living expenses.
• Your company's stock price has probably declined, leaving you wondering about your equity comp and financial planning.
• You may be considering the best use of your stimulus payment from the IRS.
• If you work for a small business that's seeking a forgivable loan from the Paycheck Protection Program, you need to understand the legal risks in the application and the use of the funds.

Here we present recent articles from the myStockOptions editorial team on these and other timely topics.

See also a full list of new and recently updated content at myStockOptions. Because Tax Season 2020 has been extended to July 15, it includes the fully updated tax-return content in our Tax Center.

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7 Things To Know When You Sell Company Stock To Raise Cash

You may find yourself in a position where you suddenly need to come up with cash to meet living expenses or other urgent financial demands. One source of these funds can be proceeds from selling shares of your company's stock, whether acquired via the open market or equity compensation (e.g. stock options, RSUs, ESPPs). Before you sell your company shares, review this article's checklist of topics to understand on tax, company, brokerage firm, and SEC rules: 7 Things To Know When You Sell Company Stock To Raise Cash.

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Insider Trading: How To Stay Out Of Trouble

If you do sell company stock quickly to raise cash, be careful. Depending on your access to confidential company information, trading company stock can actually get you into serious legal trouble, including criminal liability for insider trading. A new article at myStockOptions explains what you need to know: Insider Trading: How To Stay Out Of Trouble.

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Market Volatility: A Survival Guide For Equity Comp

When stock markets become a rollercoaster and the economy is in a downturn, you need to hang in there and remember equity comp and company shares are best viewed as a long-term deal. Several articles at myStockOptions provide useful advice on coping with stock-price volatility, down markets, and job termination (whether layoffs or other types). These include:

• Stockbrokers' Secrets: Equity Compensation Strategies For Volatile Markets
• Stomach Volatility In Your Company's Stock Without Losing Your Mind
• Job Loss And Your Stock Grants (Parts 1 and 2)
• Preventing Irrational Decisions About Selling Company Stock Or Exercising Options
• Manage Your Expectations To Avoid The Option Blues
• Reframing Your Stock Option Exercise Strategy In Volatile Markets
• Equity Compensation Strategies For Down And Rising Markets

You can find these articles and extensive related content in the sections Basics: Volatility and Job Events: Termination.

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Donating Your Stimulus Check: 4 Key Tax Rules To Know

If you don't need the extra cash, one possible use of your stimulus payment from the IRS is to donate the money to a worthy cause. For this beneficence, you may get a tax deduction. Before you seek the deduction, learn the IRS rules that apply in an article at the Forbes.com blog of our editor-in-chief Bruce Brumberg.

For guidance on the tax deduction for donations of stock instead of cash, see the related FAQ at myStockOptions.

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How To Avoid Legal Problems With Your Paycheck Protection Program Loan

Potentially forgivable loans to small businesses are available via the Paycheck Protection Program (PPP).

• In an article at Forbes.com, we present advice from former federal prosecutors on avoiding legal problems with PPP loans.
• In a separate Forbes.com article, we share insights from small-business attorneys about how to meet the conditions that make the loan forgivable, and how to use PPP loan funds in a way that avoids abusing the loan program.

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Learning Center Offers CE Credits

Keep up your continuing professional education! In our Learning Center, myStockOptions has six courses and exams offering CE credits for several professional designations:

• 30 continuing-education credits for Certified Equity Professionals (CEPs): 100% of the total requirement
• 15 continuing-education credits for Certified Financial Planners (CFPs): 50% of the total requirement
• 15 continuing-education credits for Certified Private Wealth Advisors (CPWAs) and Certified Investment Management Analysts (CIMAs): 37.5% of the total requirement
• Chartered Financial Analysts (CFAs) and Certified Public Accountants (CPAs) are encouraged to take our courses and exams and include them, if possible, when they self-document their continuing professional education

Each course of study features podcasts, articles, and FAQs from myStockOptions. They are woven into a dynamic, interactive learning tool that teaches the topics in a memorable way. The answer key for each exam also links to relevant content on the site for further reading and learning.

Stock Sales: 7 Topics To Understand When You Sell Shares To Raise Cash Quickly

These are challenging times for everyone. For reasons beyond your control, you may find yourself in a position where you suddenly need to come up with cash to meet living expenses or other urgent financial demands. The proceeds from selling shares of your company's stock, whether acquired via equity compensation or open-market purchases, can be a source of these needed funds.

However, when making stock sales you must always proceed with caution. Before you sell your company shares, review this checklist of topics to understand on tax, company, brokerage firm, and SEC rules.

1. Understand Capital Gains Tax Basics To Generate Capital Losses

When you sell shares, assuming they’re not in a retirement plan account (e.g. a 401(k) or IRA), you generate a capital gain or a capital loss. The calculation is the amount of the sale proceeds over or under your cost basis, i.e. what the shares cost to acquire plus any W-2 income you recognized for the equity compensation. For stock held over one year after a stock option exercise, vesting of restricted stock units (RSUs), or a purchase in an employee stock purchase plan (ESPP), the gain or loss is long-term, meaning a lower tax rate applies. Shares held for less than one year are taxed at short-term capital gains rates, similar to that of your salary income.

If you have a choice of company shares to sell, you want to first sell stock that generates a capital loss which you can harvest against capital gains. What that means is that you can net the capital losses against any current capital gains, with unused losses deducted against $3,000 of your ordinary income. The remainder of the loss is carried forward to future tax years. When you do not have shares to sell at a loss, your next choice is stock that has the smallest long-term capital gain.

2. Clearly Identify The Lot Of Shares You Want To Sell

When you hold company shares that you’ve received at various times, such as yearly RSU vesting or twice-yearly ESPP purchases, you want to identify at the time of sale which share lot is being sold. The default rule is “first in, first out” (FIFO), but you can choose. Any shares you received at a recent market high are the ones you want to sell for a loss. Make sure you get clarification on how to indicate specific lots to sell through your brokerage firm’s website.

3. Watch Out For Wash Sales

A “wash sale” is deemed to occur if you sell company stock at a loss but you have also separately purchased the same stock within 30 days before or after the sale. That triggers the special rules for wash sales. Under those rules, the loss and holding period are carried over to the replacement shares.

According to most experts, any restricted stock or RSU vesting 30 days before or after the loss sale would be considered a wash sale and trigger the related rules. Similar treatment applies to an option exercise, ESPP purchase, or dividend reinvestment plan on company stock. Those are all considered purchases.

4. Job Loss? Carefully Follow Your Company’s Post-Termination Stock Option Exercise Rules

You may intend to exercise stock options and immediately sell the shares to generate needed cash.  However, if you lose your job, vesting usually stops on all types of stock compensation. In that case, you must quickly exercise any outstanding vested stock options, typically within 90 days or less of your employment termination. As explained in the section Job Events at myStockOptions.com, if you do not exercise vested in-the-money stock options in time you will forfeit their value.

Alert: Check your stock grant agreement and your stock plan for the rules and exercise deadlines that apply to each option grant upon job loss. If anything is unclear, ask your company’s stock plan administrator.

5. Know Your Company’s Rules For ESPP Contributions

In an employee stock purchase plan, you can usually withdraw any accumulated funds that are waiting for the next purchase date. You need to check your company’s ESPP rules for how you do this. While an ESPP with a lookback and a 15% purchase discount can be an attractive investment in down markets, withdrawn ESPP funds can be another source of emergency funds. Furthermore, you can reduce or stop future ESPP contributions from your salary.

6. Be Mindful Of Holding Periods For ESPPs And ISOs

With stock from a purchase in a tax-qualified ESPP or an exercise of incentive stock options (ISOs), holding the shares for more than one year from enrollment/grant or two years from purchase/exercise gives you special tax treatment on the sale. Remember that the tax treatment is affected by selling those shares early. That’s called a disqualifying disposition, with different ramifications for ESPPs and ISOs. This is another reason to carefully choose and specify the lot of shares you want to sell, as explained in #2 above.

7. Beware Of Insider Trading

Understand that sometimes stock trades can actually get you into trouble. If you buy or sell shares of your company’s stock while you know material nonpublic information (MNPI), you are committing insider trading, which is illegal. Material nonpublic information refers to company secrets that, when made public, would move the company’s stock price up or down. This prohibition against trading on confidential inside information applies even if you are no longer employed by the company.

The type of information that could be considered MNPI is not always clear. However, common sense is a good guide. MNPI is any confidential company information that, once publicly known, could affect your company’s stock price in a positive or negative way. Examples include undisclosed financial results, a merger or acquisition that has not been announced, or a new product that has not been publicized. This prohibition also applies to confidential information you learn in your job about a corporate client, supplier, or other organization that you work with.

Alert: The SEC and the US Department of Justice are watching closely for insider trading related to the stock-market impacts of the COVID-19 pandemic and expect to pursue enforcement activities.

In addition to the securities laws about insider trading, your company may also have its own stock-trading pre-clearance rules, along with mandated blackout periods and window periods for stock trading.

Avoid Costly Tax-Return Mistakes: Understand Changes In IRS Forms And Reporting

The high tax-return season is upon us, and this one is a doozy. Tax reporting for stock compensation is complex to begin with. On top of that, IRS tax forms and reporting have changed yet again for the 2020 tax season (for 2019 tax returns), adding yet more confusion to an already complicated process.

As we all know, tax mistakes can be very painful. With these and the multitude of other tax changes in recent years, the 2020 tax season presents more potential than ever for confusion and expensive mistakes in IRS filings for the millions of people in the United States who received income in 2019 from employee stock compensation and sales of company shares.

myStockOptions.com explains the tax-return forms and reporting you need to know in its fully updated Tax Center. This clear and reliable information includes easy-to-understand guidance and annotated tax forms. The website's goal is to help you and your financial or tax advisors realize the full potential of equity compensation. The last thing you want is to pay too much tax or incur IRS penalties that take yet more money out of your pocket.

This blog commentary gives a helpful overview of the tax-return content on myStockOptions.com to help you during tax season 2020.

What Taxpayers Need To Know About The Changes In Tax Forms And Reporting

The IRS Form 1040 tax return, condensed in 2018, has been revised again for the 2019 tax year. The numbered schedules (supplementary forms) of Form 1040 have been reduced to three (Schedules 1, 2, 3). On the IRS Form 1040, total capital gain or loss on Schedule D is once again entered directly on IRS Form 1040, not on Schedule 1 as it was last year. The AMT calculation total on Form 6251 is entered on a different line of Schedule 2.

An article and an FAQ at myStockOptions.com explain everything that taxpayers with stock comp must know about the changes in tax forms and reporting:

• Article: Tax Season 2020: What You Need To Know About New Reporting Rules

• FAQ: What's new for the 2020 tax-return season?

the myStockOptions Tax Center has all the answers on the filing and reporting of tax returns that involve stock options, restricted stock, restricted stock units, performance shares, stock appreciation rights, and employee stock purchase plans.

• Core articles and FAQs spell out the most common mistakes people make with stock grants on their tax returns. Taxpayers, their financial advisors, and their accountants can quickly run through these to be sure they submit error-free returns.

• The reporting of stock sales is made clear by special FAQs with annotated how-to diagrams of IRS tax-return forms.

• Diagrams of Form W-2, Form 3922 (for employee stock purchase plans), and Form 3921 (for incentive stock options) show how companies report equity compensation income to employees.

• Animated videos include a succinct tutorial on key IRS tax forms related to stock-sale reporting and a video guide to avoiding costly mistakes that can lead to the overpayment of taxes.

• Engaging podcasts convey tips for tax returns.

• A fun interactive quiz on tax-return topics lets users test their reporting knowledge in a painless way, before they file their returns, and links to related content from the answer key.

• A separate website on nonqualified deferred compensation at taxes: myNQDC.com

Confusing Rules For Reporting Stock Sales

By mid-February, each brokerage firm sends IRS Form 1099-B, or the firm's equivalent substitute statement, to clients who sold shares during the tax year. The information on Form 1099-B is also reported to the IRS. A diverse set of content at myStockOptions.com relates the background issues, explains how to understand Form 1099-B after selling shares from stock compensation or an ESPP, and shows how to avoid mistakes with the cost basis that can lead to the overpayment of taxes:

• Article: How To Avoid Paying Too Much Tax: Understanding Form 1099-B And Form 8949 For Reporting Stock Sales On Your Tax Return

• FAQ: How have IRS Form 1099-B and cost-basis reporting changed for sales of stock acquired from my stock options, restricted stock, or ESPP? What do I need to do differently because of the changes?

• FAQ: What if the wrong cost basis is reported on my 1099-B? How do I report the right cost basis on Form 8949 of my tax return?

• Video: Tax-Return Reporting Of Company Stock Sales: How To Avoid Overpaying Taxes

• Video: Tax Return Forms & Reporting Rules For Stock Sales

Form 1099-B is essential for completing IRS Form 8949 and Schedule D. Taxpayers who sold shares during the tax year must submit those forms with their IRS Form 1040 tax returns. Form 8949 is where taxpayers list the details of each stock sale, using the information on Form 1099-B. Schedule D aggregates the column totals from Form 8949 to report total long-term and short-term capital gains and losses. The total from Schedule D is entered on the Form 1040 return.

However, the cost-basis information in Box 1e of Form 1099-B may be too low, or the box may be blank. This is because the rules for cost-basis reporting are somewhat counterintuitive. Also, no basis is reported for restricted stock or restricted stock units.

Sound confusing? It is.

In the myStockOptions Tax Center, the special section Reporting Stock Sales presents FAQs with clearly annotated diagrams of Form 8949 and Schedule D. Each FAQ explains and illustrates a different reporting situation involving stock options, restricted stock, restricted stock units, performance shares, employee stock purchase plans, or stock appreciation rights. Clear instructions and diagrams show how to complete the forms, whether the cost-basis information in Box 1e of Form 1099-B is accurate, too low, or omitted.

Demystifying IRS Forms 3922 And 3921

Elsewhere on myStockOptions.com, a pair of articles explains IRS Form 3922 for employee stock purchase plans and IRS Form 3921 for incentive stock options. With annotated examples of the forms that translate IRS jargon into understandable language, these articles, along with detailed FAQs (for both ESPPs and ISOs), clarify what taxpayers need to understand about the information provided by the forms, which can help them better understand the complexities of ESPP or ISO taxation. The forms can help with tax-return reporting. They also give the IRS tools for catching errors on the tax returns of people who sold ESPP or ISO stock.

Corporate Licensing Available

For companies, education is vital for ensuring that stock compensation motivates and retains highly valued employees and executives. The expert yet reader-friendly content at myStockOptions.com is ideally suited for licensing by companies and stock plan providers for their stock plan participants. A customized version of the website's award-winning content can be seamlessly woven into companies' HR, benefits, and/or compensation portals. Accessible through any internet browser, 24 hours a day, 7 days a week, licensed content from myStockOptions.com lets stock plan participants answer their own questions about their stock grants whenever they need to learn more—saving time for the stock plan staff and costs for the company. Contact us for more information ([email protected] or 617-734-1979).

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myStockOptions 2020 Conference: Register Now!

Registration is now open for the 2020 myStockOptions conference: Financial Planning For Public Company Executives & Key Employees, taking place on June 15 and 16 at the Hilton San Francisco Airport Bayfront. The conference is for financial advisors working with executives, directors, and highly compensated employees at public and private companies, as well as others interested in those topics. The event will start on the afternoon of June 15 with our Stock Compensation Bootcamp For Financial Advisors. A full day of conference sessions with expert speakers will follow on June 16. The agenda, speakers, and other details are available at the conference website.

Our conference is recommended in The 20 Best Conferences For Financial Advisors To Choose From In 2020 by financial-planning thought leader Michael Kitces!

Year-End 2019: myStockOptions Provides Guidance On Tax Planning Ahead Of Election Year 2020

Along with colored lights, Christmas trees, and office holiday parties, year-end is also a key time for financial and tax planning, especially for the millions of employees who have stock compensation or holdings of company shares.

Tax changes introduced in 2018 by the Tax Cuts & Jobs Act (tax reform) continue to affect their year-end-planning decisions. Meanwhile, the election year ahead in 2020 presents uncertainty about the future of tax laws that affect financial- and tax-planning strategies.

To help keep the season merry and bright, myStockOptions.com provides education and guidance on major issues, choices, and innovative financial-planning strategies for the end of 2019 and the start of 2020. This content is available in the website's section Financial Planning: Year-End Planning and through content licensing.

Tax Brackets And Rates Affect Year-End Planning For Equity Compensation And Company Shares

Financial planning at year-end 2019 is more important than ever for employees with equity compensation who are:

• evaluating whether to exercise stock options
• planning to sell shares acquired from restricted stock, restricted stock units, or an employee stock purchase plan (ESPP)
• donating company stock to charities

Multi-year planning for income from stock compensation and stock sales is especially crucial. "You can control the timing of stock sales and option exercises, and you know when restricted stock/RSUs will vest," notes Bruce Brumberg, the Editor-in-Chief of myStockOptions.com. "Employees with equity grants, employee stock purchase plans, and company shares should be aware of the 2019 and 2020 thresholds for higher tax rates on compensation income and capital gains, the additional Medicare tax on compensation income, and the Medicare surtax on investment income." These employees, for example, may want to consider keeping their income below those known thresholds, if possible, while evaluating whether there is enough withholding to cover the taxes owed.

"A big restricted stock/RSU vesting could push your income above the level that triggers the highest capital gains tax rate of 20% and/or the Medicare surtax of 3.8% on investment income," continues Mr. Brumberg. "If your income in the next calendar year will be less than the level that triggers those higher rates, waiting until 2020 to sell stock could give you a capital gains tax rate of just 15% and no Medicare surtax."

Factors That Drive Year-End Decisions

However, tax rates should not be the only consideration, cautions Mr. Brumberg. "Even if you predict that you will be in a lower tax bracket in the future, many experts maintain that tax rates should never be the main reason for exercising options or selling shares, or waiting to do so, at the end of the year. Instead, make investment objectives and personal financial needs, not tax considerations, the driver of your decisions."

Year-End Content Provides Education And Guidance

At myStockOptions.com, the section Year-End Planning has been fully updated for 2019, including revisions for what's different after tax reform. This content includes the following articles and FAQs.

Articles

• 12 Ideas For 2019 Year-End Planning With Stock Compensation (Parts 1 and 2)
• 7 Year-End Strategies For Restricted Stock, RSUs, And Performance Shares
• Year-End Strategies For Employee Stock Purchase Plans
• Stockbrokers' Secrets: Year-End Planning For NQSOs, Restricted Stock, And RSUs
• Stockbrokers' Secrets: Year-End Planning For ISOs
• Leading Advisors Reveal Year-End Strategies For Equity Comp & Company Stock
• Making Gifts Of Company Stock
• Making Donations Of Company Stock
• Six Ways Tax Reform Affects Your Stock Compensation And Financial Planning

FAQs

• What should be on my 2019 year-end checklist of items to review, know, and consider about my stock compensation?
• What are some key planning strategies at year-end 2019 for restricted stock, RSUs, and stock options?
• Next year I may be in a higher tax bracket. I am thinking about exercising my nonqualified stock options before then to accelerate income into this year. What issues do I need to think about?
• If I sell stock this year, I can avoid higher taxes next year, including the 3.8% Medicare surtax on capital gains. What issues should I consider?

Alongside the core year-end articles and FAQs, other FAQs in the year-end section answer advanced tax-related questions, including:

• How can employees defer income to years when they are in a lower tax bracket?
• How do the additional Medicare taxes on high earners affect planning for stock compensation?
• How do employees harvest capital losses against capital gains from company stock holdings?
• Are there strategies for using capital-loss carry-forwards from prior years?
• What risks are posed by the wash sale rule?
• What year-end strategies can help to minimize alternative minimum tax with incentive stock options?
• How can employees save taxes on company stock by making gifts and donations, including those to private foundations or grantor-retained annuity trusts?

All of these questions, and many others, are answered in the section Financial Planning: Year-End Planning. In addition, the calculators and modeling tools at myStockOptions.com allow users to play out various "what if" scenarios with different tax rates and stock prices.

For similar education and guidance on year-end planning for nonqualified deferred compensation, employees can turn to myNQDC.com, a separate sibling publication of myStockOptions.com. Key year-end content there includes the following FAQs:

• At year-end 2019, when I am deciding on salary deferrals into my nonqualified plan for the year ahead, what should be the top issues in my decision-making?
• What are the 2019 adjustments to the IRS limits for qualified retirement plans that affect nonqualified deferred compensation?

Corporate Licensing Available

For companies, education is vital for ensuring that stock compensation motivates and retains highly valued employees and executives. The expert yet reader-friendly content at myStockOptions.com is ideally suited for licensing by companies and stock plan providers for their stock plan participants. For more information, visit myStockOptions.com, email [email protected], or call 617-734-1979. Content from myNQDC.com on nonqualified deferred compensation plans is also available for licensing.

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myStockOptions 2020 Advisor Conference: Save The Date!

The 2020 myStockOptions conference, Financial Planning for Public Company Executives & Key Employees, will be held on June 15 and 16 at the Hilton San Francisco Airport Bayfront. The conference is for financial advisors working with executives, directors, and highly compensated employees at public and private companies, as well as others interested in those topics. The event will start on the afternoon of June 15 with an advisor boot camp on equity comp. A full day of conference sessions with expert speakers will follow on June 16.

Our conference is recommended in The 20 Best Conferences For Financial Advisors To Choose From In 2020 by financial-planning thought leader Michael Kitces! Please contact us ([email protected]) to be notified when registration starts at the early-bird discount rate.

Know Your Options: Comparing NQSOs And ISOs

Stock options became famous during the 1990s. It was then that many companies, even those beyond the tech industry, started to make broad-based option grants to rank-and-file employees, not just to executives, as a strategy to lure top talent. Even Seinfeld took notice. "So," Elaine says to Jerry and George in "The Money" (1997), "you understand how my Peterman stock options are gonna work?" While George (of course) feels only petty envy that she makes more than he does, it is a very good question. Before you exercise employee stock options and do any financial planning with them, you need to understand which type of options you have and their tax treatment.

While since the 1990s many companies have come to favor other equity grants, such as restricted stock units (RSUs) and performance shares, stock options remain a major form of equity compensation. Companies can grant two types: nonqualified stock options (NQSOs), the more common variety, and incentive stock options (ISOs), which offer some tax benefits but also raise the complexities of the alternative minimum tax (AMT).

Which Type Of Options Do You Have?

Before exploring the differences between NQSOs and ISOs, you must check your grant agreement and know which type of options you have. Many companies now have omnibus stock plans in which they are authorized to grant not only both types of stock options but also restricted stock, RSUs, performance shares, and stock appreciation rights (see, for example, Uber’s 2019 equity incentive plan). This is why you need to look at your specific grant to be sure of the award type you are receiving. If it’s still not clear to you, then ask the stock plan administrator or person at your company in charge of managing the employee stock option plan.

Nonqualified Stock Options

A nonqualified stock option (NQSO) is a type of stock option that does not qualify for special favorable tax treatment under the US Internal Revenue Code. Thus the word nonqualified applies to the tax treatment (not to eligibility or any other consideration). A few basic NQSO facts:

• NQSOs are the most common form of stock option and may be granted to employees, officers, directors, contractors, and consultants.
• Unexercised NQSOs can be transferred to others, such as upon divorce or gifting.
• There is no tax-code limit on the total number or value of NQSOs that can be granted.

You pay taxes when you exercise NQSOs. For tax purposes, the exercise spread is compensation income and is therefore reported on your IRS Form W-2 for the calendar year of exercise.

Example: Your NQSOs have an exercise price of $10 per share.

• You exercise them when the stock price is $12 per share.
• You have a $2 spread ($12 – $10) and thus $2 per share in ordinary income.
• You sell the stock at $16 per share, giving you $4 per share in capital gains ($16 –$12 tax basis). Whether the gain is long-term or short-term depends on your holding period after exercise.

When you exercise NQSOs, your company will withhold taxes: federal income tax, Social Security (up to the yearly limit), Medicare, and state taxes (if applicable). This withholding appears on your Form W-2 for that calendar year.

When you sell the shares, whether immediately at exercise or after a holding period, you need to report the stock sale on Form 8949 and Schedule D of your IRS Form 1040 tax return. For a detailed explanation of the tax rules, see the related sections of the Tax Center at myStockOptions.com.

Incentive Stock Options

Incentive stock options (ISOs) qualify for special tax treatment under the Internal Revenue Code and are not subject to Social Security, Medicare, or withholding taxes. However, to qualify they must meet criteria specified under the tax code:

• ISOs can be granted only to employees, not to directors, consultants, or contractors.
• There is a $100,000 limit on the aggregate grant value of ISOs that may first become exercisable (i.e. vest) in any calendar year.
• For an employee to retain the special ISO tax benefits after leaving the company, the ISOs must be exercised within three months after the date of employment termination (longer periods apply for disability and death).
• Unlike NQSOs, ISOs cannot be transferred to others (e.g. upon divorce or by gifting).

ISO Holding-Period Rules: Benefits But Risks

After you exercise ISOs, if you hold the acquired shares for at least two years from the date of grant and one year from the date of exercise, you incur favorable long-term capital gains tax (rather than ordinary income tax) on all appreciation over the exercise price. Meeting the holding-period requirements of an ISO can result in substantially lower taxes.

Example: Your exercise price is $10, i.e. the stock price at grant. You exercise when then market price is $15.

Holding period	Sale price	Taxable income
Less than 1 year from exercise*	$17	$5 ordinary income (reported on W-2) + $2 short-term gain
1+ year from exercise, 2+ years from grant	$17	$7 long-term capital gain, no ordinary income

*ISO taxation depends on: (1) when shares are sold; (2) the sale price relative to the exercise price and the market price at exercise.

However, the exercise spread on shares acquired from ISOs and held beyond the calendar year of exercise can subject you to the alternative minimum tax (AMT) and additional tax-return reporting (e.g. Form 6251). This can be problematic if you are hit with the AMT on paper gains but the company's stock price then plummets, leaving you with a big tax bill on income that has evaporated.

Alert: If you have been granted ISOs, you must understand how the AMT can affect you. You should do an AMT calculation whenever you exercise ISOs and hold the shares.

Summary

The table below, from myStockOptions.com, summarizes and compares selected major traits of NQSOs and ISOs.

Option type	Eligibility	Event that triggers taxes	Taxes	Withholding?	Tax at sale
NQSOs	Company employees, executives, directors, contractors, and consultants	Exercise	Ordinary income tax, Social Security, and Medicare on the exercise spread	Yes, at exercise	Capital gains tax
ISOs	Only company employees and executives	Sale, unless AMT incurred	Ordinary income tax, AMT, or none*	No	Capital gains tax*

*ISO taxation depends on: (1) when shares are sold; (2) the sale price relative to the exercise price and the market price at exercise.

Further Resources

For more knowledge and financial-planning insights on these different types of stock options, see the NQSO and ISO sections of myStockOptions.com. To discover what your gains would be after exercising options and selling the stock, try the site's Quick-Take Calculator for Stock Options and other tools. For potential differences in these grants at private companies, see the section Pre-IPO at myStockOptions.com.

myStockOptions Financial-Planning Conference Delivers Practical, Specialized Knowledge With Engaging Style

To register for our expanded 2020 financial-planning conference, with all new sessions and a pre-conference stock comp bootcamp, see the conference website. Discounted price for early registrations until April 20!

"The only conference of its kind: a tremendous opportunity to learn from the best in executive comp financial planning."

"Opened my mind to new ways to manage stock comp!"

"One-stop conference to learn everything about long-term incentive comp."

These were just some of the glowing attendee responses to our one-day conference Financial Planning for Public Company Executives & Directors, held on June 18 in the San Francisco and Silicon Valley area. The event attracted financial advisors from all over the United States: professionals who work with or seek to advise executives, directors, and key employees who have stock compensation, holdings of company stock, and other company benefits, such as nonqualified deferred compensation. With its delivery of practical expertise, the conference was approved to offer 8.0 continuing education credits for CFP® professionals and for the CIMA® and CPWA® certifications of the Investments & Wealth Institute®. Certified Equity Professionals (CEPs) who attended earned 7.0 continuing education credits.

Attendee Evaluations: "Wisdom, Expertise, And Good Easygoing Vibes"

The event received many positive reviews from attendees. "I thought it was lot of diverse information from very reputable sources," said one attendee afterwards. "It was good to hear about trends in the industry and learn from colleagues." One advisor, from a major brokerage firm, particularly liked "the networking" and "appreciated the opportunity to meet with RIAs we work with and ones we do not." 

"I would definitely recommend this conference to anyone on the advisory side of working with public-company executives," asserted another attendee. "myStockOptions.com is still the best resource I've found as an advisor who serves this niche market."

A selection of other attendee comments:

• "Wisdom, varied perspectives, expertise, and good easygoing vibes."
• "Great content and timely for my practice."
• "Eight hours of CFP continuing education in one day—very time-efficient."
• "The presenters were at the highest level."

The enthusiastic feedback and constructive suggestions we received will help to shape similar events in the future. The 2019 conference built upon the sold-out success of our 2018 conference, which was held in Boston.

We at myStockOptions.com thank those who attended, our speakers, and the conference's sponsors: Columbia Threadneedle Investments, Fidelity Charitable, StockShield, Charles Schwab, StockOpter, UC Berkeley Extension, Social Security Solutions, and the National Association of Stock Plan Professionals. The conference location, the Hilton San Francisco Airport Bayfront, was an excellent, convenient venue for the event.

Conference Sessions: Engagement With Expertise

With an engaging range of practical topics, the talks and panel discussions of the 2019 conference featured a distinguished speaker lineup of top industry experts. Many are leading advisors involved with financial, tax, and legal planning for stock compensation, holdings of company shares, and executive retirement plans.

In a focused yet relaxed environment for learning and networking, attendees enjoyed the following sessions:

• Leading Financial Advisor Reflects On His Career Working With Executives: Tim Kochis, Founder and CEO of Kochis Global (former CEO of Aspiriant)
• Tax Myths And Facts With Equity Compensation
• Trends In Stock And Executive Compensation: What Stock Plan Participants Need And Want, And How Advisors Can Help
• Important SEC Rules And Legal Developments Impacting Financial Planning For Stock And Executive Compensation
• Attracting And Retaining Individuals Who Receive Company Stock And/Or Options
• Planning Strategies For Stock Options, Restricted Stock/RSUs, Performance Shares, And Company Stock Holdings
• Estate Planning And Charitable Giving With Company Stock And Equity Comp
• Rule 10b5-1 Trading Plans: Cornerstone Of Legal Protection For Stock Diversification
• Strategies For Concentrated Positions In Company Stock
• Stock Grant, Employment, And Severance Agreements: Key Documents For Advisors To Understand And How To Help Clients Avoid Big Mistakes
• Donor Advised Funds Versus Charitable Foundations: What’s Best For Your Client
• Nonqualified Deferred Compensation: What Advisors Must Know To Advise Executives
• Pre-IPO Company Financial Planning

myStockOptions Conference Meets A Strong Need Among Advisors

Based on feedback from financial planners and wealth advisors who use the content, tools, and advisor directory at myStockOptions.com, our financial-planning conference meets a strong but previously unmet need for guidance in these subject areas. Moreover, a recent national survey of 1,000 stock plan participants by Charles Schwab found that while half understand the long-term value of their equity compensation, many are hesitant about exercising stock options or selling shares because of anxiety that they will make a costly mistake. The survey suggests that improved education and guidance would reduce this fear factor.

"Financial-planning clients and their families look to equity comp or company stock holdings to fund important life goals," observes Bruce Brumberg, the editor-in-chief of myStockOptions.com (pictured). "They rely on advisors for help in how to maximize, preserve, and transfer their wealth and how to prevent them from making big mistakes."

Accordingly, our conference team selected stock comp topics that are especially important for advisors to understand in serving financial-planning clients and public and pre-IPO companies. Our speakers and panelists shared a wide range of knowledge, insights, and experiences that completely met our high expectations and the goals of the conference. We hope that our conference attendees found the event a boost for their professional development, helping them deepen client relationships, further develop their reputations, gain more client referrals, and advise more employees with stock comp in ways that help them achieve their financial and life goals.

The mission of the conference is also one of our perpetual missions at myStockOptions.com: to provide an independent, unbiased source of educational content and tools on all types of equity compensation. Full access to our website is available via our Premium or Pro membership levels. Additionally, our extensive and engaging educational content on all aspects of equity compensation can be licensed by stock plan providers and companies for their plan participants. The content includes not just our easy-to-understand articles and FAQs but also our videos, podcasts, modeling tools, and fun quizzes on many different topics.

Leading Financial-Planning Experts Will Speak At myStockOptions.com National Conference

Organized by myStockOptions.com, the one-day conference Financial Planning for Public Company Executives & Directors is a must-attend event for professionals working with or seeking to advise executives, directors, and high-net-worth employees who have stock compensation and holdings of company stock. Being held in the San Francisco–Silicon Valley area on June 18, 2019, this unique conference is sponsored by some of the leaders in the financial-planning industry, including Fidelity Charitable, Charles Schwab, Columbia Threadneedle Investments, StockShield, and StockOpter. Continuing education offerings include 8.0 CFP® credits and 7.0 CEP credits.

Date: June 18, 2019
Place: Hilton San Francisco Airport Bayfront
Time: 8:00am–6:00pm
Register: https://www.mystockoptions.com/conference

Registrations by May 18 receive a $300 early-bird discount. The Hilton San Francisco Airport Bayfront is conveniently located at the San Francisco International Airport (SFO). Rooms at a specially discounted rate have been reserved for June 16–20 at the hotel, which offers free airport shuttle transportation.

Praise From Past Attendees

The 2019 conference follows the sold-out success of the 2018 conference, held in Boston. "The [2018] conference was excellent—packed with information and lessons for advisors to apply in their practices," said William Baldwin of Argent Wealth Management (Waltham, MA), a past national chair of the National Association of Personal Financial Advisors (NAPFA). "In many other conferences I attend, the presenters only scratch the surface of their topics," said Aaron R. Petersen of Capital Group Private Client Services (Los Angeles, CA), another 2018 attendee. "It was refreshing to see that many of the presenters went the next step or two deeper into their topics."

2019 Conference: Fresh Topics, New Speakers

The 2019 conference is by no means a repeat performance of the 2018 event. With a fresh range of topics, talks and panel discussions will feature a distinguished speaker lineup of top industry experts. Many are leading advisors involved with financial, tax, and legal planning for stock compensation and holdings of company shares. The conference agenda comprises the following sessions:

• Leading Financial Advisor Reflects On His Career Working With Executives, an interview of Tim Kochis, Founder and CEO of Kochis Global (former CEO of Aspiriant)
• Tax Myths And Facts With Equity Compensation
• Trends In Stock And Executive Compensation: What Stock Plan Participants Need And Want, And How Advisors Can Help
• Important SEC Rules And Legal Developments Impacting Financial Planning For Stock And Executive Compensation
• Attracting And Retaining Individuals Who Receive Company Stock And/Or Options
• Planning Strategies For Stock Options, Restricted Stock/RSUs, Performance Shares, And Company Stock Holdings
• Estate Planning And Charitable Giving With Company Stock And Equity Comp
• Rule 10b5-1 Trading Plans: Cornerstone Of Legal Protection For Stock Diversification
• Strategies For Concentrated Positions In Company Stock
• Stock Grant, Employment, And Severance Agreements: Key Documents For Advisors To Understand And How To Help Clients Avoid Big Mistakes
• Donor Advised Funds Versus Charitable Foundations: What’s Best For Your Client
• Nonqualified Deferred Compensation: What Advisors Must Know To Advise Executives
• Pre-IPO Company Financial Planning

"This is the only conference addressing and focused solely on financial planning for executives and directors," says Kent T. Hickey of Legacy Planning Partners (Allentown, PA). "My practice significantly changed as a result of the valuable information shared by industry leaders. Since I returned from the 2018 conference, fellow planners and clients have sought my input on executive compensation. Already looking forward to the next conference!"

"Excellent content," adds Madeline Van Hoorickx of UBS Financial Services (San Jose, CA). "I haven’t come across anything else that is geared toward advisors like this."

"The sold-out success of our 2018 conference shows the need for this type of specialized, exclusive conference and education for advisors," explains Bruce Brumberg, the editor-in-chief of myStockOptions.com, the creator and organizer of the conference. He encourages attendees to register as soon as possible. "It's the truth, not a mere marketing ploy, when we say that space is limited and filling quickly!"

You can register and make hotel reservations now at the conference website, where you can also read more praise from attendees for last year’s sold-out conference. Please feel free to contact us for more information (617-734-1979, [email protected]).