Stock Options Calculator for Employee Stock Option Valuation

Employee Stock Options Calculator Sign

This free online calculator will calculate the future value of your employees stock options (ESOs) based on the anticipated growth rate of the underlying company shares.

Plus, the calculator on this page also allows you to enter up to 2 alternate growth rates and generates a year-by-year growth chart so you can compare the growth of up to three different scenarios.

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Employee Stock Options Calculator

Calculate the future value of your employee stock options based on the anticipated growth rate of the underlying company shares.

Special Instructions

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Selected Data Record:

A Data Record is a set of calculator entries that are stored in your web browser's Local Storage. If a Data Record is currently selected in the "Data" tab, this line will list the name you gave to that data record. If no data record is selected, or you have no entries stored for this calculator, the line will display "None".

DataData recordData recordSelected data record: None
Mkt price:Market price:Current market price of stock:Current market price of stock:

Current market price of stock:

Enter the current market price per share of your company stock, without the dollar sign or any commas.

$
# options:Number of options:Number of options:Number of options:

Number of options:

Enter the number of options you were granted.

#
# years:Number of years:Number of years:Number of years:

Number of years:

Enter the number of whole years you would like to calculate future value for.

#
Strike price:Strike price:Option strike price:Option strike price:

Option strike price:

Enter the strike price of the company stock options you were granted, without the dollar sign or any commas. The strike price is usually the price per share you will pay if you exercise your options. In order to be in the money, the strike price must be lower than the market price.

$
Grow rate:Growth rate:Stock growth rate:Stock growth rate:

Stock growth rate:

Enter the expected growth rate of the company stock, but without the percent sign (for .06 or 6%, enter 6). If you would like to base the growth rate on the historical growth of the company, you can use the Growth Rate Calculator (opens in a new window) on this site.

%
Opt rate #1:Optional rate #1:Optional stock growth rate #1:Optional stock growth rate #1:

Optional stock growth rate #1:

Enter a second growth rate for comparison purposes. Enter as a percentage but without the percent sign (for .06 or 6%, enter 6).

%
Opt rate #2:Optional rate #2:Optional stock growth rate #2:Optional stock growth rate #2:

Optional stock growth rate #2:

Enter a third growth rate for comparison purposes. Enter as a percentage but without the percent sign (for .06 or 6%, enter 6).

%
Mkt value:End market value:End market value of exercised options:Market value of exercised options at end of term:

Market value of exercised options at end of term:

Based on your entries, this is how much you could sell your shares for if you exercised all of your options at the end of the entered number of years.

Cash need:End cash needed:End cash needed to exercise options:Cash needed to exercise options at end of term:

Cash needed to exercise options at end of term:

Based on your entries, this is how much cash you would need to exercise all of your options.

End value:End option value:Stock option value at end of term:Stock option value (spread) at end of term:

Stock option value (spread) at end of term:

Based on your entries, this will be the value of your stock options after the entered number of years. In order to realize this value, you must be fully vested, exercise the options at the end of the entered number of years, and sell the shares at the calculated ending market price.

If you would like to save the current entries to the secure online database, tap or click on the Data tab, select "New Data Record", give the data record a name, then tap or click the Save button. To save changes to previously saved entries, simply tap the Save button. Please select and "Clear" any data records you no longer need.

Help and Tools

Learn

What ESO's are, what exercising options means, and important points to consider.

What Are Employees Stock Options?

Employee stock options (ESO) are a form of equity compensation offered to employees by a corporation.

More specifically, a corporation grants stock options to employees as an incentive to help build the value of the company, which in turn increases the value of the granted options.

Vesting Schedule

Typically, the employee's right to exercise a portion of their options (buy the underlying shares) increases with time. This is referred to as a vesting schedule -- where the percentage of options the employee can exercise increases with the length of time they remain an employee of the granting corporation.

To illustrate vesting, if an employee were granted 100 ESOs and after 1-year of employment they were considered to be 25% vested, the employee would then have the right to exercise 25 (100 x .25 = 25) of their ESOs. If they are 100% vested (fully vested), they would then have the right to exercise all of their ESOs.

Exercising Options

When an employee exercises their options, they can buy the company stock at the predefined strike price, and then sell the purchased shares at the market price. The difference between the strike price and the market price is called the spread.

If the strike price of the underlying stock is less than the market value (negative spread), then there would be nothing to gain from exercising ESOs. Exercising the ESOs only makes sense when the strike price is below the market price (positive spread, or in the money options).

Important Points to Consider

This basic explanation of ESOs barely scratches the surface of all the types and intricacies of ESOs, so be sure to consult a qualified financial planner for expert guidance. In the meantime, here are a few important points to keep in mind.

  • The financial gain realized when exercising ESOs is taxed as ordinary income.
  • ESOs have no marketable value and are typically considered to be non-transferable.
  • ESOs normally cannot be held after termination of employment.
  • Study the Company Stock Options Plan carefully before taking a job just for the stock options, and certainly before exercising your options.
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Adjust Calculator Width:

Move the slider to left and right to adjust the calculator width. Note that the Help and Tools panel will be hidden when the calculator is too wide to fit both on the screen. Moving the slider to the left will bring the instructions and tools panel back into view.

Also note that some calculators will reformat to accommodate the screen size as you make the calculator wider or narrower. If the calculator is narrow, columns of entry rows will be converted to a vertical entry form, whereas a wider calculator will display columns of entry rows, and the entry fields will be smaller in size ... since they will not need to be "thumb friendly".

Show/Hide Popup Keypads:

Select Show or Hide to show or hide the popup keypad icons located next to numeric entry fields. These are generally only needed for mobile devices that don't have decimal points in their numeric keypads. So if you are on a desktop, you may find the calculator to be more user-friendly and less cluttered without them.

Stick/Unstick Tools:

Select Stick or Unstick to stick or unstick the help and tools panel. Selecting "Stick" will keep the panel in view while scrolling the calculator vertically. If you find that annoying, select "Unstick" to keep the panel in a stationary position.

If the tools panel becomes "Unstuck" on its own, try clicking "Unstick" and then "Stick" to re-stick the panel.