For employees at late-stage private companies, having Incentive Stock Options where the 409A valuation (or, stated simply, the current valuation) exceeds the grant price might feel like buying a new home that requires renovating. Your cynical side wonders whether the home is actually worth what the appraiser says, and if you should really be putting any additional money into it. Your pragmatic side embraces that this wealth-building opportunity could build a legacy.
10b5-1 plans can be a great option when divesting from concentrated equity positions in a firm, potentially offering protection against insider trading charges while avoiding the perception of failing confidence.
In this Insight, we explain these plans, how they work, and how they will be affected by new SEC rules changes.
For executives at public companies and key employees of early-stage startups, it’s common for companies to offer equity compensation in place of a higher salary. In this blog post, I’ll explain what equity compensation is and discuss the differences between each form of equity compensation.