Unexpected Risks of Early Exercise Incentive Stock Options

Companies that permit the grant of early exercise incentive stock options (“ISOs”) do so primarily to limit the impact of the alternative minimum tax (“AMT”). However, due to fairly counterintuitive tax regulations, structuring options in this fashion can expose optionees to negative tax consequences in the event of a disqualifying disposition. Read more about the tax effects of early exercise ISOs and how the tax results compare to alternate structures in our recent eUpdate here: www.dorsey.com/newsresources/publications/client-alerts/2017/04/unexpected-risks-of-early-exercise-isos

Jamison Klang

Jamie is an associate in Dorsey’s Benefits and Compensation practice group. He advises clients on ERISA, tax, and related issues affecting qualified and non-qualified benefit plans as well as executive compensation arrangements. He assists clients in strategically drafting stock incentive plans and all related SEC disclosures. He devotes a substantial portion of his practice to advising both public and private companies on compensation and benefits issues that arise in transactions.

You may also like...