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Employee stock options

RECENT NEWS
Make Millions More From Your Employee Stock Options
Forbes  Feb 7  Comment 
The IPOs of Zynga and LinkedIn have created roughly $16.7 billion in market value. Assuming that about 20% of the equity went to rank-and-file employees as stock options, the amount of instant wealth could be more than $3.3 billion.
Companies tweak employee stock options to retain the best
The Economic Times  Jul 14  Comment 
At a time of major talent crunch and concerns about employability, new forms of employee stock options (Esops) are being used to lure and retain the best performers in organisations.
What You Need To Know About Employee Stock Options
Think in Trading  Oct 13  Comment 
You may have heard the mention about employee stock options quite a few times, but may have wondered what these are exactly and how you as a common employee can actually benefit from it. Let us learn




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Jason Ng

Call options are often granted to employees of a company as part of their compensation package. Employee stock options act as incentives for employees to create value for the company in order to benefit from capital appreciation of the company's stock value.

Types of Employee Stock Options

There are 2 main types of employee stock options: Incentive stock options (ISOs) and Nonqualified stock options (NSOs).

Incentive stock options or ISOs: Employee stock options that allow the employee to defer paying a tax on the unrealized profits until the shares bought with the employee stock options are sold. The company issuing Incentive Stock Options (ISOs) do not receive a tax deduction.

Nonqualified stock options or NSOs: Employee stock options that requires the employee to pay a tax on the unrealized profits in the shares bought with the employee stock options. The company issuing Nonqualified Stock Options (NSOs) recieves a tax deduction on those unrealized profits.

See Also

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