Employee Equity Value Calculator
Value a stock option grant as it vests: vested shares, the gain over your strike price, and what the whole grant is worth.
How it works
Vested fraction = 0 before the cliff, else min(1, years employed ÷ vesting period) · Gain per option = max(0, share price − strike) · Vested value = options × vested fraction × gain
A stock option lets you buy a share at a fixed strike price, so its value is the gain — the current share price minus the strike — times the number of options that have vested. Standard grants vest linearly over four years with a one-year cliff: nothing vests until you pass the cliff, then it accrues steadily. If the share price is at or below your strike, the options are "underwater" and currently worth nothing to exercise.
Worked example
A 10,000-option grant with a $1 strike, at a $5 share price, on a 4-year schedule with a 1-year cliff, after 2 years: half has vested (5,000 options). The gain is $5 − $1 = $4, so the vested value is 5,000 × $4 = $20,000, and the full grant would be worth $40,000.
Frequently asked questions
What is a vesting cliff?
A cliff is an initial period — usually one year — during which nothing vests. Cross it and you immediately vest the portion earned so far (typically 25% on a 4-year schedule), then continue vesting monthly or quarterly. Leave before the cliff and you keep no options.
What does "underwater" mean?
Options are underwater when the current share price is below your strike price. Exercising would cost more than the shares are worth, so the gain — and the current value — is zero until the price recovers above the strike.
Is the vested value what I take home?
No. This is the pre-tax paper gain. Exercising costs cash (the strike × shares), and exercising or selling can trigger income tax, AMT or capital gains depending on the option type and timing. Treat it as a headline figure, not net proceeds.
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Educational estimate, not financial, tax or investment advice.