Questions to ask when your compensation includes company stock
Offer letters and grant documents use dense language. These are the questions people commonly ask to understand what their equity actually is, how it vests and what it could mean for taxes and planning.
Questions for HR or the plan administrator
What type of equity is this? What is the vest schedule and is there a cliff? What happens to unvested equity if I leave or the company is acquired? Where do I see my grants and transaction history?
Questions about taxes
When is income recognized? What will be withheld? Are there forms I will receive at year-end, and how do they appear on my return? These usually go to a CPA.
Questions for yourself
How much of my net worth will be tied to this company? Do I depend on it for cash in the next few years? What would I want to happen when shares vest?
What to gather
- Equity type and vest schedule
- Treatment if you leave or the company is acquired
- Expected tax at each event
- Where you can see grant history
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Frequently asked questions
What is a vesting cliff?
A period, often a year, before any part of a grant vests. After the cliff, vesting usually continues on a regular schedule.
Is this equity compensation guide advice?
No. Sam's List writes these guides for education. They describe common questions and processes, not advice for your specific situation.
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