Exercising Your Rights to Employee Stock Options
An employee stock option is a contract between employer and employee allowing the employee to purchase a certain amount of company shares at a fixed price for a limited period of time. If managed properly, an employee stock option plan can be a lucrative component of an employee’s compensation, which is why stock option plans have long been a successful and popular tool to sign non-executive employees.
The Importance of Understanding Your Stock Options
Understanding how stock options work and their potential impact on your investment portfolio is critical to successfully exercising your rights under such a plan. Of course, employees should have the ability to exercise their rights according to the contract, but this is not always the case. Sometimes an employer can pressure an employee not to sell stock after exercising an option. If the stock loses its value, you could lose your investment because of the pressure you faced not to sell. Other times, relying on the advice of your broker in deciding how to properly protect or exercise your options can be problematic if your broker was negligent or ill equipped to provide proper advice.
Common Issues Relating to with Stock Options
The most common issues with stock options arise when:
- Your employer urged you to trade through a particular firm that fails to perform its fiduciary duty to you, including advising you what to do with a concentrated stock position
- The stockbroker is not properly trained to handle stock options
- The brokerage firm handling the option was negligent
Call a Los Angeles Employee Stock Option Attorney Today
If you have lost money relating to your stock options due to the bad advice of others or because of pressure from your employer, you may have certain rights that require your immediate attention. Contact an experienced Los Angeles employee stock option attorney today for a consultation to discuss your rights and obligations.