Should I Exercise My Vested Stock Options? The Math May Have Changed
TL;DR
Industry data showing 77% of startup stock options go unexercised due to short exercise windows and tax timing.
Key industry data on stock option exercise rates revealing the scale of the 90-day exercise window problem. The finding that 77% of vested options went unexercised in Q4 2023 demonstrates how equity compensation fails to compensate when exercise windows are too short and tax treatment misaligned with liquidity.
Key Findings from Carta (2023)
- 77% of vested options went unexercised in Q4 2023
- Exercise rates have fallen from 60% in 2021 to around 23-32%
- 55% of employees find equity decisions stressful
- 69% think their company should help them understand equity