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Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3153
Experience:  EA, CEBS - 35 years experience providing financial advice
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If a CEO is granted fully vested stock option (whereby he

Resolved Question:

If a CEO is granted fully vested stock option (whereby he would still need to pay the option price which is FMV), are there any immediate tax or compensation consequences to him?
Submitted: 8 years ago.
Category: Tax
Expert:  Bill replied 8 years ago.

If the options are nonstatutory (rather than statutory or incentive stock options) options then the difference between the exercise price and the FMV is taxable as ordinary income. If the exercise price and and FMV are the same then there would be no tax implications.


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