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Data Dog, like many other companies, offers equity compensation in addition to standard monetary compensation. Equity compensation can add tremendous benefit to your compensation plan when used correctly.
It can be confusing to determine which is better - standard compensation or equity compensation, but the experts at MYRA are happy to help you understand your options, rights, and tax liabilities as they occur with equity compensation.
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Explaining Data Dog’s Incentive Rewards Offerings
Data Dog offers a variety of equity compensation options, depending on your position, hire date, and the package negotiated.
Data Dog may offer stock options, restricted stock units, and performance awards among other equity compensation. Understanding what you’re entitled to, how it works, and how it affects your bottom line is important.
Most of Data Dog’s equity compensation is dependent on the company’s profitability, which is why they offer such incentive based compensation to encourage employees to help grow and flourish the company.
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Things You Need to Know About Data Dog Stock Options
Data Dog may offer non-statutory stock options and incentive stock options. Non-statutory stock options are awarded to everyone upon hire. You know the value of the stock options and when they’re available before you accept the position.
Incentive stock options are reserved for specific employees performing well. Incentive stock options have an exercise price that’s equivalent to the stock’s fair market value on the issuance date. Non-statutory stock options don’t have that requirement.
Either way, you receive the option to exercise your option or the right to buy stock at the option’s price. You exercise the option when you can buy the stock at less than the stock’s current price. You immediately earn profit as the stock appreciates the second you own it.
The taxes for non-statutory stock options and incentive stock options are treated differently. Our professionals can help you understand the tax liabilities and what to expect so you know how to use them appropriately.
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Data Dog Performance Shares
Performance shares aren’t as common, but Data Dog may award them from time to time. Performance shares are awarded once employees meet a specific goal. Data Dog typically issues performance share over a period of a few years. The performance shares may be distributed as common stock, but sometimes also as cash or a combination of the two.
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Data Dog RSUs
Sometimes Data Dog issues RSUs or Restricted Stock Units. RSUs are unlike stock options because they are ‘real’ shares not the option to buy shares. Data Dog details the number of RSUs they’ll offer in your offer letter. Each unit is worth one share.
The letter will also dictate the vesting schedule. This is the schedule that your RSUs are worth something. Upon hiring, your RSUs are worth nothing. Once you reach the vesting period, say 12 months (as an example), Data Dog will issue the predetermined number of RSUs.
This means your compensation increases as of that date according to the fair market value of the shares at the time. You’ll owe taxes on the compensation, which a MYRA consultant can help you understand.
Your RSUs may have several vesting dates, as like most companies, they have two to three vesting dates. This encourages employees to work at the company longer in order to become vested. If you leave the company before you are vested, the RSUs expire.
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Data Dog Equity Compensation
Like many companies, Data Dog offers equity compensation alongside your regular pay. It’s important to understand what you’re receiving, what it’s worth, and how you receive it as not all equity compensation is released upon hire.
At MYRA we are happy to walk you through the potential compensation plans and show you how it affects your financial plan now and in the future.