Should i buy employee stock options - Principles of International Taxation - Angharad Miller, Lynne Oats - Google Books

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How Do Employee Stock Options Work?

Global and Southern African Perspectives. Pearson South Africa- Motivation - pages.

This book is the first Southern African edition of Stephen P. Robbins's Organizational Behaviour, the best-selling organisational behaviour textbook worldwide. User Review - Flag as inappropriate Great resource!

Selected pages Title Page. Values Attitudes and Job Satisfaction.

Perception and Individual Decision Making. For a South African company that has raised a series A funding typically greater than R10m or has more than 10 employees the following ranges are typical:.

Tax treatment of share option and share incentive schemes

This is a very common trap. Shares are a long-term 4 to 5 year incentive: Shares are generally seen as a reward for improving the future value of the Company, not past effort in getting it to where it is now. For this reason equity is typically "vested".

What that means is that the commitment for equity is made upfront, but you only receive it as time passes. The amount of time depends on how long the Company needs you to commit to it.

The most typical should i buy employee stock options and the one you should expect is four year vesting with a one year cliff. In practise this means that your shareholding in the company will vest as follows: Four year vesting with a one year shoukd would work as follows:.

If you leave at any point, you only get to keep your vested shares.

So if you leave after 2. Sometimes, some of your unvested shares can vest early if the exit comes along before the four year period ends.

This is to protect the employees who stay behind after the exit if, for example, the new owner retrenches you. In that case, it is common to allow for some of the unvested shares to vest.

Startup Equity in South Africa

So even if they vest, you won't be able to sell them for, say, five years or until the date of the exit. There are basically only two ways to make money from equity; the company gets acquired or pays dividends.

If neither of those two happen your equity will most likely be worthless.

Venture Capitalists typically only invest in companies that they think have a good chance of being acquired in the future. So if a good VC has invested in a company, you know there is a decent chance that the company could exit in the future. So, have they ever kptions out dividends before?

Employee share plans in South Africa: regulatory overview

Without either shkuld those two happening, having equity is not really valuable. If there are specific things you want more information about, please email me malan offerzen.

Justin, a startup founder himself, has invested in some of the most promising South African startups and helped those companies set up fair and effective equity structures for their employees.

Description:Apr 6, - Unfortunately how startup equity works in South Africa is complex and the Share options give you the right to buy equity in a company in the future. employee number 10, you could expect to typically get one percent of the.

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