Equity Compensation - Alternatives Pt. 1
Author: Daniel Johnson
| CPE Credit: |
1 hour for CPAs
1 hour Federal Tax Related for EAs and OTRPs
1 hour Federal Tax Law for CTEC |
Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2027 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
This course provides a comprehensive overview of various equity compensation instruments, including restricted stock, restricted stock units (RSUs), stock appreciation rights (SARs), phantom stock, and employee stock purchase plans (ESPPs). Participants will learn about the mechanics, taxation, and risk-reward tradeoffs associated with each type of equity compensation. The course will compare and contrast restricted stock and RSUs based on their unique characteristics, such as taxation, dividend and voting rights, and vesting schedules. Participants will also explore the concepts of SARs and phantom stock, understanding how they provide employees with opportunities to benefit from company stock performance without actual ownership. Additionally, the course will analyze the differences between qualified and nonqualified ESPPs, focusing on tax advantages, contribution limits, and plan requirements. By the end of the course, participants will have a solid understanding of the various equity compensation instruments and be well-equipped to make informed decisions when considering these options as part of their overall compensation package.
Publication Date: October 2024
Designed For
TBD
Topics Covered
- Mechanics of restricted stock and RSUs
- Taxation, dividend, and voting rights of restricted stock and RSUs
- Vesting schedules and risk-reward tradeoffs
- Stock appreciation rights (SARs)
- Phantom stock plans
- Qualified and nonqualified employee stock purchase plans (ESPPs)
- Tax benefits, contribution limits, and plan requirements of ESPPs
Learning Objectives
- Describe the functioning of restricted stock and restricted stock units (RSUs), including vesting schedules, tax consequences, and potential risks and rewards
- Explain how to compare and contrast restricted stock and RSUs based on their taxation, dividend and voting rights, and unique characteristics
- Explain the concept of stock appreciation rights (SARs) and how they allow employees to benefit from increases in stock price without actual ownership
- Explain the use of phantom stock as a cash-based incentive plan that rewards employees based on the company's stock performance
- Explain how to analyze the differences between qualified and nonqualified employee stock purchase plans (ESPPs) in terms of tax advantages, contribution limits, and plan requirements
Level
Advanced
Instructional Method
Self-Study
NASBA Field of Study
Taxes (1 hour)
Program Prerequisites
Prior Knowledge of Equity Compensation
Advance Preparation
None
