Description

This video by TV360 offers you expert advice on the difference between stock option plans and profit sharing plans, when your employer offers you these benefits.

Transcript

The Difference Between Stock Option and Profit Sharing Plans Real Questions Mindy: I’m analyzing our new benefit plan at work and I was wondering, what are the differences between stock option plans and profit sharing plans? Tory Johnson: Hi Mindy, I can tell you in general that a stock option program is one in which you are either given stock in your company or the ability to purchase stock usually at a preferred rate. For a profit sharing program typically you are granted a certain amount of profit, a percentage of the profit that your company produces each year. In this case your best fit is to visit your human resources department or sit down with a benefits manager and ask them to thoroughly review the specifics of the programs that your company has to offer. Then you’re able to determine what you’re eligible for and what might be the best solution for you to choose. You can also talk to an accountant to determine what the tax implications may be depending on the program that you go with.