Equity compensation is a form of non-cash pay that represents ownership in the company. It is often used to attract and retain employees, especially in tech industries. Understanding how equity compensation works is crucial for mid-career professionals, as it can significantly impact your financial future.
There are several types of equity compensation, including stock options, restricted stock units (RSUs), and employee stock purchase plans (ESPPs). Each type has its own tax implications and vesting schedules, which can affect your overall financial strategy.
“Equity compensation can be a powerful tool for wealth building.”
When you receive equity compensation, it’s essential to understand the tax implications. For instance, stock options may be taxed differently than RSUs. Consulting with a tax professional can help you navigate these complexities and optimize your tax strategy.
