Magna Mining Announces Grant of Stock Options and RSUs (2024)

FAQs

Magna Mining Announces Grant of Stock Options and RSUs? ›

MAGNA MINING ANNOUNCES GRANT OF STOCK OPTIONS AND RSUS

When you're granted stock options, you literally have the “option” to purchase company stock at a specific price before a certain date. Whether, and when, you actually purchase the stock is entirely up to you. RSUs, on the other hand, grant you the stock itself once the vesting period is complete.

In a tougher economic climate, it may make sense for companies to switch to offering RSUs instead of stock options because, unlike options, RSUs will still be worth something even if the stock price goes down. Option grants become “underwater” if their fair market value (FMV) falls below the strike price).

Convert to Upstock RSUs

Currently using Stock Options? Don't worry, shifting to RSUs is easy with Upstock. Stock options are starting to fall out of favor as the equity plan of choice by companies. With Restricted Stock Units (RSUs), workers gain ownership without buying stocks.

Restricted stock units

Like stock options, RSUs vest over time, but unlike stock options, you don't have to buy them. As soon as they vest, they are no longer restricted and are treated exactly the same as if you had bought your company's shares in the open market. In this way, RSUs carry less risk than stock options.

RSUs are considered supplemental income, and as such, the income you receive from them is subject to withholding taxes. The IRS requires a federal withholding rate of 22% for supplemental income up to $1 million, and 37% for income exceeding that amount.

Key Points: A common rule of thumb is to sell restricted stock units when they vest because there is no tax benefit to holding the stock any longer. In a silo, selling RSUs as they vest often makes sense, but the decision can be complicated if you have other forms of equity, namely employee stock options.

So how do RSUs get taxed? You'll owe taxes on your equity compensation twice, at vesting and when you sell. Vesting - On your vesting date, you automatically own shares of the company stock. The stock has a fair market value which is your cost basis.

Should I sell my vested RSU shares right away? A common strategy is to sell the shares as soon as the RSUs vest. Two benefits to this strategy are: There are usually little to no capital gains ramifications.

When you receive an RSU, you don't have any immediate tax liability. You only have to pay taxes when your RSU vests and you receive an actual payout of stock shares. At that point, you have to report income based on the fair market value of the stock.

What is a good RSU offer? ›

A good RSU offer is one that should incentivize you to put your best foot forward. One of the primary purposes of offering employees company equity is to encourage them to feel as though they have a stake in the company.

Vesting–The shares aren't yours until the vesting criteria are met. In other words, if you leave your employer before vesting, you forfeit the income. Stock price decreases–Compared to a cash bonus if the value of your company's stock decreases between the grant and vesting date, your RSU income decreases.

A stock grant provides the recipient with value—the corporate stock. By contrast, stock options only offer employees the opportunity to purchase something of value. They can acquire the corporate stock at a set price, but the employees receiving stock options still have to pay for those stocks if they want them.

Employee stock options are offered by companies to their employees as equity compensation plans. These grants come in the form of regular call options and give an employee the right to buy the company's stock at a specified price for a finite period of time.

An option grant is a right to acquire a set number of shares of stock of a company at a set price.

Companies often offer stock options as part of your compensation package so you can share in the company's success. Stock options aren't actual shares of stock—they're the right to buy a set number of company shares at a fixed price, usually called a grant price, strike price, or exercise price.