Wealth Insights

Decision Model for Non-Qualified Stock Options

This paper analyzes various strategies for an individual who holds a non-qualified stock option and who desires to maximize the amount of after-tax wealth generated by the option. In all cases, we assume the executive will do a “cashless” exercise. That is, the executive will pay the option strike price by exercising additional options and immediately surrendering option shares so the executive has no out-of-pocket cost as a result of exercising options.

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