When structuring equity compensation, companies often consider granting stock or offering stock options, each with unique implications on ownership, taxation, and financial risk. This comparison table outlines the key differences between stock grants and stock options across critical factors such as tax treatment, market risk, flexibility, and the timing of the Qualified Small Business Stock (QSBS) benefit. Understanding these distinctions can guide companies and recipients in selecting the most suitable form of equity to meet their financial goals and strategic needs.
Overall, purchasing stock outright is often a better choice, if feasible.
