Clear definitions and worked examples for equity compensation terms — RSUs, AMT, strike price, vesting schedules, ISOs, and more.
8 articles
A complete step-by-step walkthrough of the AMT calculation: AMTI, exemption, rates (26%/28%), and comparison to regular tax. Includes a $200K salary + $300K ISO spread worked example.
A disqualifying disposition is selling ISO shares before meeting the holding period. Learn the two requirements, tax consequences, and when selling early is actually the better strategy.
Form 6251 is how you calculate Alternative Minimum Tax. Walk through the key lines, understand AMT adjustments and preferences, and see a worked example with ISO exercise.
A vesting schedule determines when you earn your equity. Compare time-based, milestone-based, and hybrid schedules, plus real examples from Google, Amazon, and startups.
Cliff vesting is the initial waiting period before any equity vests. Learn about the standard 1-year cliff, what happens if you leave early, and how different companies structure their cliffs.
Your strike price determines your profit when exercising stock options. Learn how companies set it, the role of 409A valuations, what happens when options go underwater, and the tax implications.
The AMT is a parallel tax system that ensures high earners pay a minimum level of tax. Learn how it works, current exemption amounts, and why ISO exercises are the #1 trigger for tech employees.
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