JC,
RE: SUN employee stock options
That's good to know Scott feels that way. Only problem is that when you exercise the option, the company realizes the liability (I am pretty sure), as you do the income taxes (not just fed tax, SS, State tax, medicare, local tax), even though you may not sell the stock immediately.
Kinda blows.
About 95% of employee stock option transactions are exercise & sell.
So, if you require Employees to exercise and hold, they have to pay the strike price out of pocket, AND pay income taxes on the strike-to-market value difference. Quite a chunk of change if they have a large option grant.
Before I left, I actually did an exercise and hold on a price dip. This way, I paid lower income taxes then, and still have the stock that now qualifies for LT cap gains. I tried to convince others that when the market price fell on a big dip, and they would want to own the stock anyway, they should exercise and hold.
Unfortunately, most engineers just don't get it.
JG |
