March 2021: Newly revised!

Make sure your equity generates wealth, not a shocking tax bill.

Stock options, RSUs, job offers, and taxes—a detailed reference, including hundreds of resources, explained from the ground up, for employees and managers.

  • 80-page online book
  • 365+links and references
  • Newly updated for 2021!
  • Digital access to this title in the Holloway Reader
  • Downloadable PDF and EPUB for personal offline use
Length: 80 pages
Edition: e2.1.0
Last Updated: 2021-03-17
Language: English
ISBN (Holloway.com):
978-1-952120-03-9
This is the first thing I share when someone is thinking about their equity compensation.Ryley Reynolds(Thrive Capital)

Table of Contents

Introduction
Scope
Who May Find This Useful
A Note on Fairness
Roadmap
How This Guide Is Organized
When to Turn Elsewhere
Seeking Professional Advice
Equity Compensation Basics
Growth and Risk
Compensation and Equity
The Goals of Equity Compensation
Fundamentals of Stock Corporations
Stock and Shares
Public and Private Companies
Governance
IPOs
Sales and Liquidity
Startups and Growth
Fundraising, Growth, and Dilution
Dilution Illustrations
Stages of a Startup
The Option Pool
Counting Shares
Classes of Stock
How Equity Is Granted
Stock Options
Vesting and Cliffs
How Options Expire
Kinds of Stock Options
Early Exercise
Restricted Stock Units
Using Promissory Notes to Buy Stock
Less Common Types of Equity
Tax Basics
Federal Taxes
State Taxes
Taxes on Equity Compensation
409A Valuations
Taxes on ISOs and NSOs
The AMT Trap
Stock Awards vs. ISOs vs. NSOs
Taxes on RSUs
Tax Comparison Table
Tax Dangers
Plans and Scenarios
What Is Private Stock Worth?
Can You Sell Private Stock?
Stock Option Scenarios
Summary of Dangers
Offers and Negotiations
Equal Treatment
General Expectations
Offers
Offers From Startups
Questions Candidates Can Ask
Typical Employee Equity Levels
Typical Startup Advisor Equity Levels
Negotiation Tips
Offer and Negotiation Dangers
Documents and Agreements
Further Reading
Considerations for Founders
Considerations for Candidates and Employees
Types of Equity Compensation
Taxes
Vesting and Expiration of Stock Options
Negotiation
Forms and Tools
Disclaimer
License
Holloway’s Guide to Equity Compensation is a comprehensive, authoritative resource for founders, managers, and employees. Decisions around equity compensation can be life-changing, and this Holloway Guide offers practical advice on everything from exercising stock options to tax implications to negotiating a job offer from a startup or stock corporation. I wish I’d had access to a resource like this earlier in my career.Leo Polovets(Susa Ventures)

Researched, written, and edited by experts.

Written by practitioners. Edited by professionals.

Original Authors
Joshua Levy (Holloway)
Joe Wallin (Carney Bradley Spellman)
Contributions and Review
José Ancer (Egan Nelson LLP)
Michael Brown (Fenwick & West)
George Grellas (Grellas Shah LLP)
Zach Holman
Chris McCann (Greylock Partners)
Leo Polovets (Susa Ventures)
Eric Tyson
Production
Rachel JepsenEditor
Andy SparksEditor
Hope HackettResearch
Dmitriy Kharchenko & Leigh TaylorGraphics

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