What is stock-based compensation (SBC)? | Brian Feroldi posted on the topic | LinkedIn (2024)

Understanding the different types of stock-based compensation is essential to navigating today's job market. This informative post clearly explains the key options, providing valuable insights for both employees and employers. Don't miss out on this indispensable knowledge!

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5 Tips for Employees with Equity Compensation 💡 Tip #2 - Know What Type of Stock Options You Have 📚Navigating the stock options landscape? Let's delve deeper into the three primary types: 🌍Non-qualified Stock Options (NSOs) 📊: NSOs are the most common type of stock options. They are taxed as ordinary income when exercised. The difference between the stock's current value and the strike price (the "spread") becomes taxable income. NSOs are typically offered to a broader range of employees.Incentive Stock Options (ISOs) 💹: ISOs come with tax advantages. When exercised, they aren't subject to ordinary income tax. Instead, they're taxed at the capital gains rate, but only when you sell the stock. Restricted Stock Units (RSUs) 📈: RSUs are company shares that vest over time. They're not actual shares until they vest, at which point you own them outright. RSUs are taxed as ordinary income based on the stock's value when they vest.Understanding the nuances of each type is crucial for optimizing your financial strategy and making the most of your equity compensation. Knowledge is the first step to maximizing your benefits! 🚀(Full Guide in the first comment) 📘#StockOptions #NSOs #ISOs #RSUs #FinancialStrategy

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To retain top talent, some organizations issue restricted stock units (RSUs) to their highest performers. While the potential of extra income is exciting, it’s important to understand what RSUs entail and how to maximize their benefit. Wealth Advisor Alyssum Malone, CFP®, BFA™ shares important considerations to get the most out of your stocks.

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RSU's (restricted stock units) and other equity based compensation has become more and more popular. Knowing how they operate as well as how you should manage them is key to unlocking their potential. From vesting schedules to tax implications to proper diversification of your investments there are numerous considerations and strategies that should be taken into account. RSU's can do tons of great things such as:1. Alignment of interests between both employees and employers.2. Allow room for growth, if the company does well so do you.3. Automatic investing, even once they are vested until you sell them you own a part of the company. If the company grows so does your money.4. Increased compensation compared to what you might receive if only getting cash compensation.There are also some negatives to RSU's as well:1. Market volatility can cause the value of those RSU's to fluctuate and potentially cause less predictable income or tax considerations.2. Risk of complete loss. There are a few ways you may not receive this compensation. If you leave your company before the vesting schedule any unvested stock will be given back to the business. Or if the company you work for where to file bankruptcy then the shares would be worthless.3. Unwanted taxes. RSU's create an ordinary income tax as soon as they vest which you may have to pay in when you file your taxes. If the stock appreciates after it vests you may also have capital gains tax upon the sale of that stock.4. A large accumulation of RSU's can over concentrate one's investment in a single company. This can be mitigated by making investments in other areas or selling some of your RSU's to reposition into other opportunities so you ensure not to take on too much unsystematic risk.With all things in mind equity compensation is great for both the business and the employee. The key to it however is understanding it can be more complex than other forms of compensation and should therefore be managed with an increased level of care and intentionality.

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To retain top talent, some organizations issue restricted stock units (RSUs) to their highest performers. While the potential of extra income is exciting, it’s important to understand what RSUs entail and how to maximize their benefit.

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High-level explanations from Pequity on common stock/equity questions - mainly around types of stocks, what we've see with taxes, and why the a crazy high fundraise may not be good for you as an employee.#equity #comp #comptech #compensation #hr #hrtech #humanresources #software #stock #options #rsus #vesting #ISOs #NSOs #PSUs #units #education #blog

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https://lnkd.in/gYBdun9BEver felt like your stock program is a mystery? Pequity helps make it make sense in our newest blog post.1️⃣ 𝗧𝘆𝗽𝗲𝘀 𝗼𝗳 𝗘𝗾𝘂𝗶𝘁𝘆: Understand Options, RSUs, and PSUs to make smart choices.2️⃣ 𝗧𝗮𝘅 𝗜𝗺𝗽𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻𝘀: Different stocks, different taxes. Get clarity to avoid surprises.3️⃣ 𝗖𝗼𝗺𝗽𝗮𝗻𝘆 𝗩𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻 𝗠𝗮𝘁𝘁𝗲𝗿𝘀: A high valuation isn't always a win. Learn why.#Equity #Investment #FinancialWisdom #CareerTips #StockProgram #Compensation #Totalcompensation #HRresources

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While being awarded restricted stock units (RSUs) by your organization is exciting, it can come with risks and tax implications. Our team shares important considerations to get the most benefit from your stocks.

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Employee Equity and Management - Stock Options vs. RSUs: What’s the Difference?Ever asked about Restricted Stock Units and what they are? Decoding the puzzle of employee equity? Understand the difference between Stock Options and RSUs with our comprehensive guide. Stock options give employees the right to buy shares at a fixed price, while RSUs are granted outright upon vesting—each with unique tax considerations. Make informed decisions about your compensation strategy. Discover which equity compensation aligns with your company’s vision and your employees’ success. Read our full analysis for insights on navigating these crucial investment choices.#EquityCompensation #StockOptions #RSUshttps://lnkd.in/dbwg6aHh

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What is the equity market? How do I invest in stocks?The equity market, also known as the stock market or share market, is a platform where stocks and shares of publicly traded companies are bought and sold. It is a crucial part of the financial system, providing companies with a means to raise capital and investors with an opportunity to own a portion of those companies.Investing in stocks involves purchasing ownership stakes (shares) in companies, which entitles you to a portion of their profits and assets. If the company performs well and its value increases, the value of your shares may also rise, allowing you to potentially earn a profit when you sell them.Here are the basic steps to invest in stocks:1. Educate Yourself: Before investing, it's important to understand how the stock market works and the associated risks. There are numerous books, online courses, and resources available to help you grasp the basics of investing.2. Set Financial Goals: Determine your investment objectives, whether it's saving for retirement, buying a house, or simply growing your wealth. Your goals will influence your investment strategy.3. Create a Budget: Assess your financial situation and set aside money you can afford to invest. Make sure you have an emergency fund in place before you start investing.4. Choose a Brokerage Account: To buy and sell stocks, you'll need a brokerage account. There are various online brokers available that offer different features and fee structures. Choose one that suits your needs and preferences.5. Research Companies: Decide which companies you want to invest in by researching their financial performance, business model, industry trends, and future prospects. Look for companies that align with your investment goals.6. Diversification: It's advisable to diversify your portfolio by investing in different companies and industries. Diversification can help reduce risk and balance out potential losses.7. Decide on the Type of Order: When you're ready to buy a stock, you can place either a market order (buy at the current market price) or a limit order (set a specific price at which you are willing to buy).8. Monitor and Review: Keep track of your investments regularly, staying informed about the performance of the companies you've invested in and the overall market conditions.9. Stay Disciplined: Investing in the stock market involves ups and downs. Stay disciplined and avoid making impulsive decisions based on short-term market fluctuations.