As part of a potential new job opportunity, part of my compensation would be in the form of stock. Let's say the company (for sake of example) is worth $100 today. I basically have two options for getting them:
1. Traditional ownership. I would be granted X% of the company. This gives me the same rights as other minority owners of the company. Unfortunately, I would have to pay income taxes this year on whatever X ends up being since this is a grant and not an investment.
2. Some other class of unit created than above. Basically, they want to create a different class of unit that kicks in above the current valuation of the company ($100). Once it's established, I would be granted Y% of the value of the business beyond the first $100. This would help me avoid a large income tax obligation immediately, but I wouldn't have the same type of ownership as existing owners.
I'm not sure what the vesting schedule (if any) for any of this is, nor what the exact numbers would be in either scenario. I would assume I would receiver a higher % in option two.
Here are my questions:
1. Does anyone have experience with #2? I've never seen it done in the way being described. I'm familiar with other things like equity appreciation rights.
2. Assuming there is no vesting schedule (not sure if there is yet or not), is there any way for me to shelter some of that ownership stake in #1 from an immediate income tax liability?
3. Any other comments/questions would be appreciated.