Uber and Lyft IPO and taxes

Microsoft oasisred
May 10 18 Comments

For employees, how do taxes work for your options on IPO. Are taxes calculated based on the IPO date or when the lockup period ends?

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TOP 18 Comments
  • Pinterest poissons
    Options are not taxed until exercise, and then taxed as income. RSU is taxed as income at IPO with stock price = the price the company sells to underwriters (not opening day price). That is $45/share for Uber. Most employees have RSUs not options.
    May 10 13
    • Lyft xFFu83
      Since the company is now* liquid
      May 10
    • Google wdyt
      @xFFu83, if the company is not public yet, can this sell to cover taxes still happen? or does that question not make sense since maybe non public companies do not give RSUs?
      May 11
    • Lyft xFFu83
      Uber and Lyft were giving RSU before they were public but they would not actually vest. They had double trigger vesting. For example, once you hit your 1 year cliff, you were owed the RSU but they would not be given to you until a liquid event such as IPO. So for tax purposes, you had not actually received any RSU compensation until IPO.
      May 11
    • Google wdyt
      interesting! what about if the employee left? would they eventually be given the RSU?
      May 11
    • Lyft xFFu83
      Yes, if you hit your time based vesting trigger, that stock is only waiting for the liquid based vesting trigger. You as an employee performed your part so even if you leave, when the company becomes liquid, the stock will best. There is however an expiration date to the RSU, something like 7 years, so if the company is not liquid by then, they go away, whether or not you are an employee.
      May 11
  • Uber Staff
    IPO date
    May 10 0
  • Lyft xFFu83
    It is different for employees who have options vs employees who have RSU. Only early employees have options so for most employees, it is RSU. For RSU, anything that was vested at time of IPO is taxed at that price as income. This is handled by the companies withholding the appropriate amount of shares so ideally the employee pays the taxes at best time with the shares.
    May 10 0
  • LeanTaaS ♥️ data
    Options -

    Depends on your strike price

    Depends when you exercised them.

    Depends when you sell them.

    I don't think IPO price or lockup price matters.
    May 10 1

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