Should we merge [create synonyms] the tags employee-stock-options and employee-share-plan, or is there enough distinction to keep both. I guess we can create a distinction, but would need more appropriate definitions for both the tags and undertake a re-tagging exercise for the set of questions.
When looking at plan that allow employees to purchase share of the company they fall into several groups:
- shares vs options
- publicly owned companies vs private companies
The placement in this grid determines tax implication, put it also determine what happens if a person leave the company, what happens to their shares. Other tags the exit: retricted-stock , option-exercise and options allow the question to be properly binned.
I don't think the two tags make it clear to a questioner what tag(s) are appropriate for their question. So I vote to merge them.
the above answer (@mhoran_psprep) dices some of the distinction, though in addition to the above, I suggest additional consideration:
- employee-share-plan typically is offered to all employees either pre- or after- tax, depending on the plan after meeting certain requirements: typically minimum length of employment . Somewhat similar to health benefits, etc.
employee-stock-options are typically not offered to all, but to a few as compensation and as reward for superior performance. In addition, employee-stock-options are not to my knowledge, available in a tax deferred plan.
In summary, the former is the employee's choice, and the latter is the choice of the employer; therefore, I believe the separation is important.
"Stock options" and "Share plans" typically have very different risk profiles and tax treatments. Exercising a stock option can be done in a way that does not require the employee to invest their own cash. Many stock purchase plans allow the employee to spend cash to purchase stock at a discount. This up-front investment reduces the number of employees for whom the investment is affordable and prudent.
I think there should be two separate tags. Perhaps we need to review the tags, to make sure that individual questions are tagged appropriately.