The Post-Termination Exercise Period (PTEP) for Options Explained
TL;DR
Industry standard for 90-day exercise windows explained, including why companies are now extending them.
Foundational explainer on the 90-day post-termination exercise period standard. Explains why 90 days became the default (IRS ISO regulations) and documents the industry shift toward extended windows. Critical context for understanding why the current system fails UK employees.
Key Findings from Carta (2022)
- 90-day PTEP is standard due to IRS regulations for ISOs
- ISOs convert to NSOs after 90 days post-termination
- 82% of companies have 89-92 day exercise windows
- Growing number of companies extending to 7-10 years