Rickard Vernet emphasizes the importance of understanding stock option terms, particularly the implications of the 90-day post-termination exercise period (PTEP) standard in the US. This short window can cause many departing employees to forgo their vested stock options due to financial difficulties, leading to a loss of potential value. Vernet argues that this US-centric standard may not be applicable or beneficial for European startups, who may blindly adopt it without considering the differing tax regulations. He advocates for a deeper understanding of these standards, to better align them with local contexts.
This highlights the importance of understanding the origins behind market standards, especially those that originate from specific tax and/or regulation, and their implications.
The standard 90 days post termination exercise period for US stock options causes a lot of vested stock options to go unexercised by leaving employees.
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