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Apple Employee stock option scheme

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  • 15-05-2015 12:46am
    #1
    phishcakes
    Registered Users Posts: 326 ✭✭


    Just started at Apple and wondering if its worth it to opt into this scheme, ive never done one of these schemes befor so im not sure how they work and if the high irish taxes make it worthwhile..


Comments

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    #2
    Frogdog
    Registered Users Posts: 983 ✭✭✭Frogdog


    What exactly are the details of the scheme?


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    #3
    Atlantic Dawn
    Registered Users Posts: 81,115 ✭✭✭✭Atlantic Dawn
    M


    Normally it's an option to buy shares in a couple of years time at X price, you can either buy them or not when the time comes around. Not sure if you then need to hold on to them for so long or not.


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    #4
    Value Hunter
    Closed Accounts Posts: 337 ✭✭Value Hunter


    Generally company stock options for employees are very generously priced. Include large gains in stock prices (like apple has experienced) and they can become hugely valuable.

    Can't comment on your own situation without more info, for example are they available freely or in place of salary/bonuses????


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    #5
    phishcakes
    Registered Users Posts: 326 ✭✭phishcakes


    Thank for the replies,

    Basically you can purchase Apple common stock at 15 percent less than the stock's market price at the beginning or end of each six month offering - which ever is lower, you can have up to 10% deducted from your eligible pay to purchase stock and you or your accountant has to look after the tax on it like its seperate from your pay and the company


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    #6
    Colonialboy
    Registered Users Posts: 1,533 ✭✭✭Colonialboy


    phishcakes wrote: »
    Just started at Apple and wondering if its worth it to opt into this scheme, ive never done one of these schemes befor so im not sure how they work and if the high irish taxes make it worthwhile..

    Opt In.
    Deductions will be made but before they convert what you have been deducted into shares you will get one last chance at the end of each 6 month period if you want togo ahead.
    you can always just take the cash, no tax, no issues, you get back what you put in and it was a handy little savings piggy bank.

    In the meantime do alot more investigation.
    You could get hit hard if Appl stock felt alot and you were selling stock and using future stock sales to pay the tax.


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    #7
    jank
    Banned (with Prison Access) Posts: 13,018 ✭✭✭✭jank


    You will be liable on tax for the difference between the discounted price and the actual price of the share, as this will be a capital gain.


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    #8
    phishcakes
    Registered Users Posts: 326 ✭✭phishcakes


    jank wrote: »
    You will be liable on tax for the difference between the discounted price and the actual price of the share, as this will be a capital gain.

    Didn't realise that, taxed befor i even make any money


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    #9
    phantom_lord
    Registered Users Posts: 10,894 ✭✭✭✭phantom_lord


    Just be careful of having too much invested in one company; have seen people lose their job and a decent proportion of their savings and pension when their employer went under.


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    #10
    jank
    Banned (with Prison Access) Posts: 13,018 ✭✭✭✭jank


    phishcakes wrote: »
    Didn't realise that, taxed befor i even make any money

    Not sure how it works in Ireland but I had a similar scheme with a company here. When your shares vest, as in they pass into your ownership at whatever price they are, then the difference in the vesting price and the money you outlaid is deemed a capital gain. Therefore at the end of the tax year, you had to declare it and pay tax

    In Ireland, you may have to just pay tax when you sell it, not sure but being Ireland it definitely won't be tax free.


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    #11
    phishcakes
    Registered Users Posts: 326 ✭✭phishcakes


    jank wrote: »
    Not sure how it works in Ireland but I had a similar scheme with a company here. When your shares vest, as in they pass into your ownership at whatever price they are, then the difference in the vesting price and the money you outlaid is deemed a capital gain. Therefore at the end of the tax year, you had to declare it and pay tax

    In Ireland, you may have to just pay tax when you sell it, not sure but being Ireland it definitely won't be tax free.

    I think the tax could be the killer here, Apple are a solid company and i can't see there share price sliding anytime soon


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    #12
    shanec1928
    Registered Users Posts: 4,123 ✭✭✭shanec1928


    phantom_lord wrote: »
    Just be careful of having too much invested in one company; have seen people lose their job and a decent proportion of their savings and pension when their employer went under.
    Can't see the richest company in the world going under anytime soon.


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    #13
    phishcakes
    Registered Users Posts: 326 ✭✭phishcakes


    Can this thread be deleted please


    ** MOD PLEASE DELETE **



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    #14
    evostik
    Registered Users Posts: 262 ✭✭evostik


    I work in a different US multinational. The scheme you quote looks the same.

    In summary you are guaranteed a 15% discount on the share price when it falls or stays flat over the six month period. You can obtain a far higher discount if the share price rises over the six month period. You should be able to sell the shares immediately thereby realising a 15%+ gain. The only risk is if the share price falls between the purchase date and the date the shares get allocated to your account which can take 1-2 weeks post purchase, or if the EUR:USD rate changes significantly between purchase date and the date of sale.

    Any gain (discount) is liable to income tax and must be paid within 30 days of purchase by filing a Form RTSO1 with Revenue.

    For example assuming you made the minimum 15% gain, you would be liable for 52% Income Tax/PRSI/USC, leaving a net return of 7.2%. If the share price rises the net gain can be significantly more.

    The other factor to consider is that you need to transfer the USD proceeds back to EUR which could cost you 2-3% of your net gain by the time the bank takes it’s cut through the FX rate. There are cheaper options such as transfermate which would give you a better exchange rate than your bank.

    In summary, a minimum 15% discount, less income taxes, less FX charge, leaving a minimum return in the region of circa 3%-5% with minimal risk. Most people use the ESPP scheme as a short term savings scheme where they dispose of the shares every six months straight after purchase to capture the gain which beats the current bank deposit rates.



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    #15
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    https://www.boards.ie/discussion/comment/95503369#Comment_95503369

    No it’s not. General replies like this tie in with your 71k post count



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