It dealt with the attribution of the dates

Stock options do not need it! It seems that they always have a bad reason to speak of them. In the United States, a scandal is swell in the high-tech companies, where a lie was apparently widespread. It dealt with the attribution of the dates. So he went to the sinews of war! Stock options in effect to acquire shares in a course set in advance. If the authorization to purchase starts, as by chance, the day where the title is at the top, this looks like to a lottery where every time you win. And, in this case, the earnings can be substantial. Similarly, in France, the da Vinci case came recalled how this type of deferred compensation results in a lively debate. View digests visibly not the gains made so by the CEO.

However, it would not be confining stock options in a closed club reserved for managers only. Would be better to instead plead that this motivation tool is accessible to the widest College of collaborators.

Only these days, executives are entitled to ask questions. First, the stock market seems hesitant. It was enough of a few sessions to clear gains in 2006. Then, seen from a distance, the mechanism of stock options appears much complicated. While the examination it reveals so fabulous heritage deals! A guided tour is therefore necessary. Director of asset management of the BPE (European private bank) and the Arkéa group, Eric Franceschini was to serve as a guide to readers of the "weekend Echos".

His explanations deserve the detour for the dedicated words of tourist brochures. As the highlights our expert, the stockoptions can not only identify substantial capital gains, but it is possible to secure the latter and also to reduce the tax burden. You can then use its options on securities to increase its borrowing capacity. A true magic square somehow! However, before you bring together all these sides, should know what is talking about. As the rules of the game have changed somewhat in recent years. They are the subject of a reminder in the sidebar on the left. It is better to begin by reference, or even do not hesitate to return several times. Because once these data in mind, it is possible to develop several types of strategies. Its ambitions and its means, as it favours tax optimization or securing of its earnings, self-financing or the use of the lever of credit.

1. Preserve

the added value

And to do so when the priority of a framework or a leader is to preserve its value "In this case, says Eric Franceschini, appropriate to resell the securities immediately after having exercised its option. This operation of bought-sold presents a double advantage: the product of the assignment is widely used to finance the cost of acquisition. Therefore, it is not necessary to advance funds. In addition, the risk capital is void. But the disadvantages column appears the taxation. It is not possible to qualify for the reduced rate linked to the extension of portage for two years after the exercise of the option (see box).

2. Optimize the taxation

If the priority of the recipient of stock options instead of optimizing the tax, it must then arrange to exercise its right when the courts are closest to the exercise price. So, the added value of acquisition will be thus reduced. However you need to know that it is imposed at a rate which is located at 41 or 51.

However, a formidable tax loophole can be found in the gift. It's to his children for example, titles obtained by the exercise of stock options. But do not give them any time: it should be just before as donors them in turn. "So, explains Eric Franceschini, the gift allows to eliminate all capital gains (in any case those of acquisition and transfer, if delete discount).". In Exchange, it is certainly pay donation fee. But generally, they are void or low because of the discounts. "A flat however with this winning strategy, the period of unavailability must have been met.

Otherwise, two other techniques may be suggested to reduce the tax invoice. But they require prior possession of securities. For what, by selling securities in gains, or terminating a PEA in losses, can reduce the taxable profit related to stock options.

3. Keep titles

and added value

Unlike the added value of acquisition, that assignment is let to 27. Would be better therefore preferred the latter Yes, provided you have the means to be patient. It should be able to take eight years or more, so that the tax exemption is total. But, the day of the exercise of the option, it must also be able to finance the purchase of its shares. Not to mention the payment of tax rebates and contributions.

Funding problems therefore arise. But they will not necessarily be a fatal barrier. Because, in the matter, the use of the credit may be considered. Banks are there

restive PAS, in any case, not the BPE.

And then a solution lies eventually in the unlockable wage savings. It can fund the exercise of options. Thus purchased shares will be paid into savings plan and will be available at the expiration of the minimum period of five years. For what gains will benefit from the tax exemption related to the savings.

Only, it is not enough to be able to buy shares at a preferential course. The important is to keep this value during all the time where the securities will remain unavailable. A solution for this is to use hedging instruments. The expression is fear, but the reality that it refers to is very old. The ancestors who had founded the first grants of agricultural raw materials in the late 18th century were already use. The purpose, in this case, is to freeze the immediate gain, it involving parallel consideration.

The most common is the term sale. "It is a commitment to sell the shares at an agreed price on the transaction, in the future, explains Eric Franceschini." Therefore, the recipient of stock options is completely immune against future fluctuations in the course of the title. "In practical terms, it will be placed both in the buyer of a put option (put) and seller of an option to purchase (call), these options are both of the same value. Maturity, two scenarios can occur. Either course of action in the spot is above the exercise price. In this case, the Bank has the call. Either course of action in the spot is less than the exercise price. And then, the client performs the Lup.

A second technique is called the tunnel. There, the holder of shares is a right but not a duty to sell in the future at a price of protection on the transaction. Technically, the client is always buyer of an option to sell (put) and seller of an option to purchase (call). But, here, the exercise price of the call and put are distinct. At the end of the option, three situations are possible. The share price is higher than the exercise price of the call: the Bank then exercised its option and buys securities from the agreed course. The course of action is less than the exercise price of the sale option: in this case, it is the client that exercises its option. So he sold securities to previously agreed course. Finally, it may be the course of the action above the exercise price of put and less than the exercise price of the call: nothing happens then.

The third cover technique lies in the purchase of put. With it, the Subscriber is assured to receive a minimum price on the sale of its securities, can also expect more substantial gains if the title monte. Simply, this double security has a price: it involves the disbursement of a premium.

From a tax point of view, the first two methods raise a query to which the administration of taxes should soon be answered. We have seen above that the gift is a great way to lighten his invoice. Therefore, the question is what happens when a donation of covered actions even before they have been materialized by the lifting of the options: give the hedging contract at the same time as the lifted shares Similarly, what value calculate gift rights: the titles the day of the donation or on the value of the package formed by the combination of actions and coverage In all cases, the question was raised with the competent services.

4. Increase its

borrowing capacity

Moreover, stock options can provide a great service to those who benefit from. They can leverage their borrowing capacity. An opportunity to consider in a time where interest rates are still reasonable. The idea is summarized as follows: it is available without waiting for the corresponding funds in the amount of the upcoming sale of the shares. However, these will be voluntarily preserved to optimize the taxation.

In the absence of blankets such as those described above, the individual uses a loan secured on the shares, as it would on any account regular titles. "The amount of the shares in warranty must be, generally, 150 of the amount of the loan," says Eric Franceschini. Similarly, a clause of upgrading of the value of the guarantee based on the change in the course of action is generally expected.

On the other hand, if the options are covered, whether they be lifted, the amount of the loan can represent 100 of the covered amount. Conversely, if options are not exercised or covered, it is absolutely not question to seek a loan.

However, despite all these advantages, a question that angry cannot be avoided, is that of the ISF. Once it is in possession of his actions, they enter into the recipient, but it will have been "minimized" of the amounts expended on the purchase actions. Of course, so that it is not lifted, stock options do not have to be declared. They are therefore exempt.