Comments on: Minimizing Taxes on Your Executive Compensation http://blog.alliancebernstein.com/index.php/2012/06/21/minimizing-taxes-on-your-executive-compensation-2/?utm_source=rss&utm_medium=rss&utm_campaign=minimizing-taxes-on-your-executive-compensation-2 The AllianceBernstein Blog on Investing Wed, 19 Jun 2013 01:24:59 +0000 hourly 1 http://wordpress.org/?v=3.4.1 By: Daniel Eagan http://blog.alliancebernstein.com/index.php/2012/06/21/minimizing-taxes-on-your-executive-compensation-2/#comment-13097 Daniel Eagan Mon, 16 Jul 2012 13:07:53 +0000 http://blog.alliancebernstein.com/?p=1858#comment-13097 Yes, one could conceivably use exchange-listed options to capture premium as a partial protection for some of the unrealized profit on an employee stock option—but you’d have to be careful of the tax ramifications If you incur losses on the listed option, they would be short-term capital losses, which you may not be able to use to offset the ordinary income generated from gains on the exercise of the employee option. Consult your tax advisor for more detail. In addition, many companies do not permit the use of listed options on their stock. Separately, officers considering such a strategy will face further complications under SEC registrations. Yes, one could conceivably use exchange-listed options to capture premium as a partial protection for some of the unrealized profit on an employee stock option—but you’d have to be careful of the tax ramifications If you incur losses on the listed option, they would be short-term capital losses, which you may not be able to use to offset the ordinary income generated from gains on the exercise of the employee option. Consult your tax advisor for more detail.

In addition, many companies do not permit the use of listed options on their stock.
Separately, officers considering such a strategy will face further complications under SEC registrations.

]]> By: John Olagues http://blog.alliancebernstein.com/index.php/2012/06/21/minimizing-taxes-on-your-executive-compensation-2/#comment-12273 John Olagues Sat, 30 Jun 2012 23:21:56 +0000 http://blog.alliancebernstein.com/?p=1858#comment-12273 Dear Sir/Madam; Early exercises of employee stock options, selling the stock and diversifying causes penalties in the form of forfeited "time value" and paying an early tax. Does your company ever recommend selling exchange traded calls prior to exercise to reduce risk of substantially in-the-money ESOs. ESO Holder Dear Sir/Madam;

Early exercises of employee stock options, selling the stock and diversifying causes penalties in the form of forfeited “time value” and paying an early tax. Does your company ever recommend selling exchange traded calls prior to exercise to reduce risk of substantially in-the-money ESOs.

ESO Holder

]]>