Here’s how to protect your equity if you get laid off

Over 22,000 tech employees have been laid off this year and the number is expected to increase throughout the year. If you have found yourself in this situation, you should know what will happen to your equity because it could cost you a life changing sum of equity if you don't act.

You will understand by the end of this guide.

• The basics of equity compensation.
• How leaving your company impacts the status of your equity.
• Strategies to save your equity from expiring.

Equity 101

Tech employees know that their stock options are a key element of their compensation package, it vests over time, and that they purchase this equity at its original price.

It is difficult to decide if and when to buy your shares. You can control the timelines when you change jobs. You lose control when you lose your job.

Investing a small amount of time to figure out what you want to do can potentially lead to a life-changing sum of money.

You should know that no unvested shares are left. What to do with your vested and unexercised shares is the only question when you're terminated. There is a period of time between when you leave the company and when your vested stock options end. There is a post-termination exercise window.

Stock options are returned to the company when they end. You don't retain any of the value when this happens. If you leave your job and don't exercise your options, they will be expired. You lose them when this date comes around.

The post-termination exercise window usually lasts 90 days. You have three months from your terminated date to make a difficult decision about your stock options. How will you pay for the options and their tax consequences if you exercise them?

It is not a good time to lose your job during a recession. It can be hard to think about exercising equity at a time when you are worried about your finances.