Equity Participation and Stock Options
Of the many facets contained in executive compensation packages, stock options and other avenues for equity participation offer perhaps the greatest upside as well as the greatest potential for confusion and uncertainty. Whether the company in question is an established enterprise or a start-up, the opportunity to participate in its equity ownership can form a disproportionately large amount of an executive compensation package. Any executive considering a compensation arrangement that includes stock options needs to fully understand the potential rewards, risk, limitations, and obligations that come along with equity participation.
Empowering Our Clients With Knowledge About Equity Participation
The executive compensation attorneys at Shlansky Law Group work with talented c-suite executives, managers, and other high-value employees to guide them through the nuances of grants under employee stock option plans. We have extensive experience reviewing such agreements and possess a wealth of knowledge about the mechanics and implications of equity participation.
Our goal is to empower our clients with the knowledge that they need to make thoughtful, informed decisions about the futures of their careers. This includes thoroughly dissecting the terms of equity participation, including:
- How and when an employee’s interests vest.
- Extent of option grants.
- Option price.
- Expiration of option.
- Requirements for exercising option.
- The potential tax and financial consequences of the plan under multiple scenarios.
- What happens to the executive’s interests upon the termination of the employment relationship.
- Effect of death or disability on option rights.
- Any terms or conditions imposed on the executive’s ownership participation, such as confidentiality, non-competition, and non-solicitation obligations that could restrict the executive’s future opportunities.
We regularly review and negotiate executive compensation packages which contain a range of arrangements that govern the employee’s grant and vesting of equity, stock, or other ownership in the company. These include:
- Employee stock ownership plans (ESOPs).
- Stock option plans.
- Restricted stock.
- Stock appreciation rights.
- Employee stock purchase plans (ESPPs).
- Section 401(k) plans.
- Other individual equity plans that grant restricted stock or stock appreciation rights (SARs).
At Shlansky Law Group, we understand that the considerations involved when evaluating a new opportunity are multi-faceted and often complicated. These complexities only grow as executives continue to advance in their careers and the terms of their employment reflect the high value that they bring to the table.
Even the most business savvy and seasoned executives need objective, insightful, and sound legal counsel at these critical career junctures. At SLG, our clients’ success and security are paramount, and we leverage decades of combined legal and business experience to ensure that our clients move forward with clarity and confidence.
Contact Shlansky Law Group to Discuss Your Stock Option and Equity Participation Arrangements
If you have questions or concerns about the terms of a proposed stock option or equity participation arrangement, please call Shlansky Law Group at (617)497-7200 or reach out to us at info@slglawfirm. We look forward to the opportunity to work with you.