Evaluating Equity Compensation

1 links
Holloway Guide ToEquity Compensation

Evaluating Equity Compensation

Common questions covered here
What do I need to know to evaluate my offer of equity compensation?
What factors are most important when determining the value of an equity compensation package?

Once you understand the types of equity and their tax implications, you have many of the tools you need to evaluate an offer that includes equity compensation, or to evaluate equity you currently have in a company.

In summary, you have to determine or make educated guesses about several things:

That’s a lot, and even so, decisions are uncertain, but it is possible to make much more informed decisions once you have this information.

What Is Private Stock Worth?

We now turn to the question of determining the value of private company stock. We’ve seen how stock in private companies often can’t be sold, so its value is difficult to estimate.

The value of equity you cannot yet sell is a reflection of three major concerns:

  1. How well the company is doing now—that is, how profitable it is, or how many customers it is attracting.

  2. You’ve been reading an excerpt of an online book. Support the authors and the ad-free Holloway reading experience by purchasing it for instant, lifetime access plus a PDF download.
If you found this post worthwhile, please share!
Get full access to this book.
This page is an excerpt of a much larger book. Get full access now.

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
  • 364+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: 2021-02-19
Language: English
ISBN (Holloway.com):
978-1-952120-03-9

Equity Compensation

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

Learn more.

Enter your email for more details, updates from the authors, and free samples from the book.