However, the taxes can be complicated, depending on the type of stock options.
But even with an initial discount, there's no guarantee a company's stock price won't decrease after exercising a stock option.
Restricted stock units are 'like a cash bonus'Another benefit, restricted stock units, or RSUs, are company shares granted upon hiring, which vest over time.
"We like to establish a target of what they like to hold in company stock," said Garasic, who aims to keep allocations of a single stock to 10% or less.
Employee stock purchase plans offer ‘free money’Many publicly traded companies may also offer discounted company shares via an employee stock purchase plan, or ESPP.
Persons:
Bruce Brumberg, Ransom, Cooper, Matthew Garasic, vesting, Garasic, there's, Kristin McKenna
Organizations:
LanaStock, Getty, Zenith Wealth Partners, National Association of Stock Plan, Management, Darrow Wealth, Darrow Wealth Management, CNBC
Locations:
Pittsburgh, Boston