Equity grants

Restricted stock (RSUs) counts as pay in each year it vests, at what the shares are worth that year, and is taxed like your pay. The shares grow at the rate you entered for the grant, or with your market return if you left it empty.

An option counts in two years: the year you exercise it, when you pay to buy the shares, and the year you sell them.

Shares that would vest in the year you retire or later are left out, since you’d have stopped working by then.

What’s left to vest and an option’s strike price are shown as you entered them, in today’s dollars, whichever dollars the page is in.

For each year you exercise or sell an option, its card lists:

• Cost to buy: the strike price times the shares, paid in the year you exercise.
• Taxed as pay: for non-qualified options, what the shares are worth above the strike when you exercise, taxed like your pay that year. Incentive stock options aren’t taxed when you exercise. If you sell them within two years of the grant or one year of exercising, that difference is taxed as income in the year you sell.
• Proceeds: what the sale brings in, which goes to that year’s cash.
• Gain on the sale: what the shares made after you bought them, taxed at the long-term capital gains rate. For incentive stock options you hold long enough, the whole gain above the strike is taxed this way.

LongSpan uses one share price a year, so shares sold in the year you buy them make no gain. A sale for less than the shares were worth when you bought them counts as no gain, not a loss. LongSpan doesn’t model the alternative minimum tax.

A grant you exercise or sell after your plan ends, or one with nothing vesting during it, still gets a card. It says so, rather than showing figures for years the plan doesn’t reach.