Re:The Open Guide to Equity Compensation
by laurencerowe on Monday April 14, 2025 @01:05PM
(#43683460)
At least when I was there the options cost 40% of the strike price (whatever the current market price was at time of issue). The other difference is that you shift the income tax to time of exercise.
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Yeah my numbers were made up, 40% of strike price does sound more reasonable (and obviously provides less leverage, but still some). It being pre-tax also helps with leverage vs taking cash.
Another benefit of the company's options is that they have a 10 year term, vs most market options which expire in < 1 year. You can get LEAPS but those are still max 2-3 years.