Setting up options is funnily complex and expensive - it should be as easy as paying salaries

The bureaucracy related to setting up option programs and managing them, as well as paying taxes, is a massive blocker for companies to set up programs as well as getting world class talent.

The requirements from Oy-perspective are crazy, and simply the setup and registration tends to require lawyer help. I don’t see any reason why this should be massively more complex than paying salaries. The reason of course lies in the share ownership challenges and treatment of those, but maybe that could be massively simplified.

Also, the taxation of calling options is ludicrous at minimum. It’s fine to pay taxes once you get some money out of them, but paying for example 10k cash for option taxes while getting an imaginary benefit of 20k now is stupid. Getting that 20k in cash might take easily 5-10 years in the typical setup of growth company lifecycles, and even then it is massively uncertain.

Proposals:

  • simpler and thus easier setup and registration requirements for option programs

  • separate taxation from calling the options

  • link taxation only to actually receiving money from the options (or in the event of IPO, tie the tax result to that)

Upvoters
Status

In Review

Board

Culture

Date

5 months ago

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