Stock Option Ownership
Are you a woman who has been granted stock options by your company? Do you understand how they work? I can help! Let’s start slowly.
When you are granted a stock option, you must first understand that this gives you the OPTION (or the right) to purchase stock at some point in the future, at a specified price. This is an option, but not an obligation, and there are cases where you may not want to exercise your right.
When you are granted stock options, there is typically a stock option agreement that accompanies the grant. The agreement should indicate 5 important stock option grant aspects that you should pay close attention to:
Strike Price = Exercise Price = Option Price
# shares
Vesting schedule
Expiration date
Details (if you resign/fired, violate terms of agreement, etc).
Often, your grants appear electronically - you are notified via email, and may have to ‘click to accept,’ at which point they will appear in an online account. However, there is typically an official ‘grant’ document that accompanies the grant. You may have to access it via PDF electronically. If you cannot figure this out, go to HR and ask how to grab a copy of the grant for your files and advisor.
I recommend that you review each grant document and be sure you have a way to keep track of important dates. Ideally, your exercise strategy should fit into your overall financial plan, and specific goals. At Green Bee Advisory, our financial planning tool allows us to keep track of your options for you, as well as offers you a personal financial portal where you can see every aspect of your financial life updated daily in one place.
And lastly, it is important to have an opinion as to the direction of the company stock, as well as to understand that not all options will create the value you are hoping for. Some will create much more, and some may expire worthless.
Are you an independent woman looking for a financial life partner? Contact us today for help. We’d love to see if we are a match!