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Episode Five: How Can My Company Offer Equity-Based Compensation (Profits Interest Grants and Non-Qualified Stock Options)?


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It’s important to incentivize your key workers, and there are clear business advantages to offering equity-based compensation to key employees.

Many businesses choose to reward team members in the form of partnership profits interest grants or through nonqualified stock options, but it’s important to understand what you’re getting—and what you’re giving up. Not to mention, you’ll need to comply with specific IRS regulations and understand the tax implications.

Where do you even start?

In this episode of The Wrap, Clint Freeman, CPA and Michael Andrews, CPA, ABV join our hosts to answer the question: How can my company offer equity-based compensation? (What are profits interest grants and stock options?)

After listening to this episode, you’ll be able to:

  • Understand what stock options and a profits interest grants are (and the difference between them)
  • Be familiar with examples of how profits interest grants and stock options both work
  • Know the difference between vested and unvested interests
  • Understand what both mean for your taxes

Recommended resources for additional learning:

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