Stock Compensation
Stock options, RSUs, vesting, and everything related to equity comp at a startup.
27 terms
Beginner
Exercise
The act of paying the strike price to convert your stock options into actual shares.
Exercise Price
Another term for strike price; the cost to buy one share when exercising your options.
Restricted Stock Units (RSUs)
A promise to deliver shares of stock as they vest, taxed as income on each vesting date.
Stock Options
The right to buy company shares at a fixed price (strike price), granted as compensation.
Strike Price
The fixed price you pay to buy shares when exercising your stock options.
Vesting
The process of earning your equity over time, typically over a four-year period.
Vesting Cliff
The initial period (usually one year) during which no equity vests at all.
Vesting Schedule
The timeline and cadence at which your equity grant becomes yours (e.g., 4 years with 1-year cliff).
Intermediate
Cashless Exercise
Exercising options without paying cash upfront by simultaneously selling enough shares to cover costs.
Double-Trigger Acceleration
Accelerated vesting that requires both an acquisition AND termination of the employee.
Equity Offer Evaluation
The process of assessing the real value of equity in a job offer beyond just the share count.
Exercise Window
The time period during which you can exercise your vested stock options.
Incentive Stock Options (ISOs)
Tax-advantaged stock options for employees that qualify for long-term capital gains treatment.
Non-Qualified Stock Options (NSOs)
Stock options taxed as ordinary income on exercise, available to employees and contractors.
Post-Termination Exercise Period (PTEP)
The time after leaving a company during which you can still exercise vested options (often 90 days).
Refresh Grant
Additional equity granted to existing employees, usually annually, to maintain retention incentives.
Restricted Stock Award (RSA)
Actual shares granted upfront with vesting restrictions, often paired with an 83(b) election.
Single-Trigger Acceleration
Accelerated vesting triggered by just one event, usually an acquisition, regardless of employment status.
Tax Withholding (Equity)
The taxes automatically deducted when RSUs vest or NSOs are exercised, often by selling shares.
Advanced
83(b) Election
An IRS filing that lets you pay taxes on equity at grant rather than at vesting, locking in a lower value.
Alternative Minimum Tax (AMT)
A parallel tax system that can trigger a large tax bill when you exercise ISOs at a private company.
Clawback
A provision allowing the company to reclaim previously paid compensation under certain conditions.
Early Exercise
Exercising stock options before they vest, typically paired with an 83(b) election for tax benefits.
Performance Stock Units (PSUs)
Equity that vests only if specific performance goals are met, in addition to time-based vesting.
Phantom Stock
A cash bonus tied to stock value that mimics equity without granting actual shares.
Repricing (Options)
Lowering the strike price of existing stock options, usually after a company's value has dropped.
Section 409A
IRS code governing deferred compensation; requires options be priced at fair market value.
Other categories
Definitions are intended as plain-English educational summaries. Not legal, tax, or investment advice.