Tell me about tracking employee stock plans
Many companies provide employee stock options as an incentive, a form of compensation, or both. When tracking employee stock options in Quicken, keep these points in mind:
- Employee stock options
Employee stock options are basically the "right" to buy shares of stock at a fixed price. Many companies give options to employees as an incentive to work to raise the market price of the stock above the option price, so that when the employees buy their shares (called exercising their options), they can sell the shares at the market rate and make a profit. There are two types of employee stock options: nonqualified (NQSO) and qualified (incentive, or ISO). The difference between the two is important for tax purposes when you exercise your options and sell your shares.
There are two types of employee stock options. ESPPs (employee stock purchase plans) allow you to purchase company stock at a discount, while ESOGs (employee stock option grants) are stock grants that don't require you to invest your own money.
- ESPPs - A plan established by your company that permits you to buy company stock, usually at a discount.
- ESGOs - A qualified retirement plan designed to give you an ownership stake in the company. Companies contribute shares of stock without requiring you to invest your own money.
There are some special tax considerations for ESPP (employee stock purchase plan) shares.
Before creating an employee stock option grant in Quicken, be sure to set up a separate account to track your options.
When you receive an ESOG (employee stock option grant), you generally can't exercise it right away (this is where the incentive comes in; the idea is that you'll stay with the company and share in it's future success). The length of time you need to wait prior to exercising is called a vesting schedule.
- Vesting Schedule - When you receive an employee stock option grant, you usually cannot exercise your options right away. Typically you vest in your options over an extended period of time. For example, you may vest in 20 percent of your options after the first year, and then vest in an additional 20 percent of your options in each subsequent year.
What can I do?
Enter an employee stock option grant (ESOG)
Exercise employee stock options
Reprice employee stock options
Edit an employee stock option grant
Buy ESPP (employee stock purchase plan) shares
Sell ESPP (employee stock purchase plan) shares
What do I need to know about tax terms for ESPP (employee stock purchase plan) shares?
What if something goes wrong?
Special issues for corporate acquisitions and related transactions for ESPP (employee stock purchase plan) shares
- About recording corporate actions for ESPP (employee stock purchase plan) shares
Quicken does not support all transaction types for use with ESPP shares, because some transactions require cost basis in their calculations, and cost basis is not available for ESPP shares until you actually sell. To record one of the following transactions for ESPP shares, consult your employer for more information and then enter the values that your employer provides.
Record a corporate acquisition (stock-for-stock)
Record a corporate spin-off of new securities
Record a return of capital