Stock options golden handcuffs

This psychological reluctance is the fundamental logic behind how stock options can act as golden handcuffs and why so many companies utilize them as a retention tool.

The Employee Stock Option Fund ESO Fund can help in those situations.

Unlocking the golden handcuffs – Michael DeAngelo – Medium

ESO provides financing to current and former employees of private companies to allow them to exercise their stock options. These valuable funds can be utilized for more important and tax-efficient expenses such as relocation. Moreover, these types of bonus payments are fully taxed which make them a very expensive way to exercise options which also trigger additional taxes.

The Employee's Guide to the Golden Handcuffs | Ben Fanning

As such, bonus dollars need to be grossed up twice for taxes to cover exercises which means the bonus can be 3x to 4x higher than the actual dollars needed to do the exercise. ESO does not require a transfer of title or even a security pledge on the underlying stock.

Candidates will retain the benefits of ownership such as voting but most importantly, the ability to benefit from future appreciation in value. Moreover, an ESO advance allows the candidate to take a portfolio approach to private company stock.

The 'Golden Handcuffs' - The Simple Dollar

With the ESO program the candidate can retain stock in their old company as well as vest additional equity in the new company. For more information regarding ESO funding and how we can help recruiters and their placement candidates, please contact us. How Recruiters Can Unlock Golden Handcuffs.

Contact Baker Way Suite San Mateo, CA Related Articles ESO Video Overview of Funding Process Conserve Your Cash by Exercising Employee Stock Options How to Calculate Alternative Minimum Tax for Exercise Stock Options.

The ESO Fund does not provide legal, financial, or tax advice.