Gearing up for an exciting IPO? In the dynamic world of tech startups, pre-IPO employees have a unique opportunity to build substantial wealth through their company's equity compensation.
When working at a tech company in its early stages, a common tax tactic used by the founders and executives around their equity compensation is the 83(b) election. Yet, even today, many in the tech world are unaware of this potentially potent tax-saving strategy, no less know when it is appropriate to deploy.
Stock options are a core component of many compensation packages, especially for technology executives. Among the various types of stock options, Non-Qualified Stock Options (NSOs) are a popular choice.
For many Tech executives, figuring out the right mix of Roth and Traditional 401k contributions is complex. With the Secure Act 2.0, the IRS will push out the RMD (required minimum distribution) age to 75 in 2033. This could make Traditional contributions more attractive.
Restricted Stock Units (RSUs) are a popular form of equity compensation many companies use to incentivize and retain employees. RSUs are often granted as part of an employee's compensation package and represent a promise to deliver company stock at a future date, usually after a vesting period. While RSUs can provide a valuable opportunity for employees to participate in their company's growth, they also come with unique tax considerations, including asymmetric tax risk.
If you're a tech employee who has been granted stock options as part of your compensation package, it's essential to understand the tax implications associated with these options. In particular, you may be subject to the alternative minimum tax (AMT) if you exercise incentive stock options (ISOs). This piece will explore the basics of incentive stock options and the alternative minimum tax.
Spring is the perfect time to freshen up not just your home but also your finances. As a tech professional, you work hard to build a successful career and secure your financial future. However, just like your physical space, your wealth plan may also need some spring cleaning to ensure it is in optimal shape.
Over the last several decades, employee equity has become a much larger part of employee compensation. Although not limited to tech companies, it has become especially popular among private and public tech companies to align employee incentives with that the company's performance of the company. The rationale is that if employees are compensated in company equity, their equity value will improve over time as employees are incentivized to maximize their company equity through greater work performance. Through equity compensation, employees have more "skin in the game," so to speak, concerning the company's performance.
Last week, one of the largest single value destruction events occurred in market history. As a result, many investors might be asking why, or even how, did this happen?
When it comes to employee compensation, many tech companies provide equity and stock-based benefits to their employees. The intention behind this kind of stock-based compensation is to align the performance interests of the employee with the employer. One common form of equity-based compensation from publically traded and late-stage private, VC-backed tech companies are restricted stock units (RSUs).