Equity Compensation Guide
Understand and manage your employer equity grants: stock options, restricted stock units, employee share purchase plans, and more.
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What is Equity Compensation?
Equity compensation refers to shares, options, or other equity awards you receive as part of your employment. These grants give you an ownership stake in the company you work for and can represent a significant portion of your overall wealth. Properly documenting them is essential for estate planning.
Types of Equity Grants
Stock Options (ISO/NSO)
The right to purchase company shares at a fixed price (the "strike price"). Incentive Stock Options (ISO) offer tax advantages in the US, while Non-Qualified Stock Options (NSO) are more common globally.
Restricted Stock Units (RSU)
A promise to receive company shares after vesting conditions are met, typically based on continued employment. RSUs have no strike price, so you receive the full value of the shares when they vest.
Employee Share Purchase Plans
Programmes like ESPP (US), SAYE (UK), and SIP (UK) allow you to purchase company shares at a discount, often 10-15% below market price, through payroll deductions.
UK & International Schemes
Country-specific programmes such as EMI (Enterprise Management Incentives) and CSOP (Company Share Option Plan) in the UK offer tax-advantaged equity participation for employees of qualifying companies.
Key Terminology
Understanding these terms will help you manage your equity grants effectively.
Strike/Exercise Price
The price per share at which you can purchase shares under a stock option grant.
Vesting Schedule
The timeline over which your equity grants become exercisable or fully owned. Common schedules are 4 years with a 1-year cliff.
Vesting Cliff
The initial period before any shares vest. After the cliff (typically 12 months), a portion of shares vest and then continue vesting periodically.
Acceleration
A provision that speeds up vesting, often triggered by a change of control (company acquisition) or termination without cause.
Section 83(b) Election
A US tax election that changes when restricted stock is taxed, using its value at the grant date rather than at vesting. It must be filed within a strict deadline after the grant.
Expiration Date
The deadline by which stock options must be exercised. Typically 10 years from the grant date, but may be shorter upon leaving the company.
How to Add Equity Grants
Recording your equity grants ensures they are included in your estate plan and can be properly managed.
- Go to Asset Management → Personal Asset Tracker → Equity Comp
- Click "Add Equity Grant"
- Enter the company name and select the grant type
- Add the number of shares and grant date
- Enter financial details (strike price, current share price)
- Set up vesting information (schedule, cliff, duration)
- Upload your grant agreement and related documents
- Save the grant to your portfolio
Document Checklist
Keep these documents accessible for each equity grant:
- Grant agreement (the formal award document from your employer)
- Vesting schedule document (dates and amounts)
- Tax filing documents (Section 83(b) election, if applicable)
- Exercise confirmations (for options you have already exercised)
- Plan documents (the company’s equity incentive plan)
Upload Documents
Tax Considerations
Equity compensation has tax implications that vary by country, grant type, and when you exercise or sell. Expat183 helps you track whether a grant is tax-advantaged and any related filings, but does not provide tax advice.
- Record whether each grant qualifies for tax-advantaged treatment
- Note any tax scheme references (e.g. HMRC reference for EMI)
- Track Section 83(b) elections for US-based grants
- Keep tax filing documents with each grant record
Professional Advice
Will Planning & Equity
Including equity compensation in your will ensures these assets are distributed according to your wishes. When creating your will, equity grants added to your portfolio can be included alongside your other assets.
- Unvested grants may have specific transfer restrictions
- Stock options may expire if not exercised within a set period after death
- Some grants may have change-of-control or acceleration provisions
- Beneficiary designations on equity plans may override will instructions
Keep Records Updated
Some equity plans allow beneficiary designations. Learn about nominee management across all asset types (opens in a new tab).
Frequently Asked Questions
Where should I record equity vs financial assets?
Equity grants from your employer (stock options, RSUs, ESPP) belong under Equity Compensation. If you bought company shares independently through a brokerage account, record those under Financial Assets instead.
What if my grant type isn’t listed?
Select the closest equivalent from the available options, or choose "Other" and describe the grant in the notes field. The system supports a wide range of grant types covering most global equity compensation schemes.
Should I record unvested grants?
Yes. Recording all grants, vested and unvested, gives a complete picture of your equity compensation for estate planning. Use the vesting fields to track progress.
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