Get Ready For Potential Stock Option Exercises Before Year-End

Stock options' last hurrah? Well, maybe. Human resources leaders and CFOs need to know that executives who possess, as a group, $22.5 billion of vested, unexercised, in-the-money stock options,¹ could exercise those stock options as we approach year-end. This may have major implications for companies and their HR leaders and CFOs.

The typical senior executive at a publicly traded company has approximately $2.4 million of in-the-money vested, unexercised stock option gains outstanding. The typical named executive officer group (i.e., generally, the top five executives) at a company has a total of approximately $8.2 million (and that's only the top five). Further, as with all data, there are outliers, such as the 55 individual executives who have more than $50 million each in vested unexercised stock option gains outstanding. Executives may be contemplating exercising some or all of their stock options as year-end approaches, for several reasons: