Is it possible to manage employee stock options?

I can't see how these can be managed using Sharesight. When I do an execute and hold, they are then full shares, so I can manage them from that point on in your software. Is it possible to manage the options themselves, vesting dates, strike prices, etc?

Thanks in advance,

Alison
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  • Hi Alison,

    There's no specefic functionality around vesting dates and strike prices.

    If you have a way to value the options then you could certainly record the options and then manually record the conversion of options to shares.
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  • Is there a way to record in the money but unexercised options. In my case it is my largest position but missing from the portfolio because I can't see how to record the.
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  • Hi Stuart,

    Thanks for your message! The only way this would be possible is to add a custom investment as described by Scott below: https://help.sharesight.com/au/unquot...

    Hope this helps!

    Have a lovely day.

    Cheers,

    Emma
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  • Stuart,

    I have some experience with employee shares and options. I assume that you are talking about options over listed shares. If they are unlisted then you will need to use a custom instrument to create the market price but the method below will still work.

    The method below works well to track the performance both pre and post vesting and also makes the taxation pretty straightforward.

    Here is what I do:

    For listed shares I have two portfolios in Sharesight. The first is for the granted but UNVESTED shares or options. The second portfolio is your REAL portfolio which represents the shares you now own on a vested and taxable basis. The real portfolio can be the same portfolio that you use for other shares in your name.

    If the employee grant is made up of shares when they are granted you would record a buy at the current market value of the shares being issued, even if you paid nothing for them. If they are options then the buy should be at the exercise price of the option.

    When they vest you would sell them at the market value on the day of vesting from your UNVESTED portfolio. You should do this even if you don't actually sell them. This applies for both shares and options.

    You would then buy them at the same market value as above in your REAL taxable portfolio. At this point they are now like normal shares. If you hold them and then sell you will be able to use the CGT functionality from the day they vest until you actually sell them. The cost price of the shares at the vesting date in your real portfolio will also represent the value that will be deemed to be taxable income. (in the case of the options the income will be the market value less the exercise price at time of vesting.) In Australia this should match the ESS statement that your employer will give you.

    The above is built around Australian tax rules but the principles should work in most countries. As always seek your own tax advice to ensure that you are complying with the relevant rules.

    Hope this helps,

    Andrew Bird
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