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Equity Compensation - Basic Terms, Episode 6

Many of my clients have equity compensation as part of their benefits packages. Since I've been seeing them more frequently I figured it’s something I should talk about. It’s not the simplest thing to make sense of so let's start breaking it down over the course of a “series” of episodes.

Equity compensation is a benefit an employee receives that is connected to their company stock. It can be private or public, but for most people, it is public. There are many forms but the most common I see are ESPPs, ISOs, RSUs, and RSAs. Listen to this episode to learn what all of these acronyms mean and enough of the basics to get you headed in the right direction.


You will want to hear this episode if you are interested in...

  • What equity compensation is? [1:14]

  • The most common forms of compensation [1:29]

  • A massive issue with equity compensation [2:21]

  • Understanding the terminology [4:25]

  • The sales tip section: Referrals [9:48]

  • This week’s FLASHBACK [11:23] 

Starting at the beginning with some common terms 

Having a grasp on the basic terminology when talking equity compensation can go a long way towards understanding what’s being said. If terms like restricted stock units, restricted stock awards, stock options, award grants, vesting, blackout/window/lock-up periods, exercise, exercise price, expiration, the spread, in the money, underwater, and option agreement leave you scratching your head then this episode is for you! In it, I explain all of these terms in an easy to understand manner.

Referrals… we all love them & want more of them… but how?

Referrals come down to conversations with the kind of clients that you want to replicate. Identify 10 clients that you wish you had more of. Ask them to meet for coffee or some other short time commitment type of thing. At the meeting, you're going to say something along the lines of, “I would like to ask for your advice. I've really enjoyed working with you as a client and I'd love to work with more clients like you. If you were me, how would you find more people like you?” You may be surprised by the answers you get! 

Haunted flashback of the week

In Northeast Ohio, haunted houses are big. At least until this year with COVID. Regardless, going to haunted houses is one of my favorite memories growing up. The first one I ever went to was a grade school party. I wasn't one of the cool kids and I was surprised to be invited to this “cool kids” party. I had no idea what to expect. All I remember is the coolest kids in my class ended up going through a good portion of the haunted house in an army crawl. This position allowed them to escape the workers— who could actually touch you back then—  it also helped the kids to not see the scary faces. It was awesome for me— I was scared to death— but it was hysterical seeing the reactions from the super cool kids. 

In high school, I had a memorable haunted house visit. I didn't even escape the parking lot. I was hit by a car and ended up getting an x-ray and a cast instead. In college, haunted houses were my go-to date. They were so different than going to a movie. Admittedly, I haven't been to one in years. My friends all hate them. My kids do as well. Perhaps this means I’m failing as a father. I’ll have to work harder at guilting my kids to visit some haunted houses next year! Until then enjoy one for me… if you dare!


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