What Happens to My Stock Options When I Change Jobs?
Last reviewed: July 2026
When you change jobs, your vested stock options usually come with a 90-day exercise window, after which they expire worthless. Unvested RSUs are forfeited the day you leave. Vested RSUs you already own are yours to keep. The expensive part is the stock options, because exercising them costs real cash and can trigger a six-figure tax bill before you can sell a single share. Getting your stock options job change strategy right starts with knowing exactly which equity you keep, which you lose, and what each decision costs.
Key Takeaways
- Unvested RSUs are forfeited when you leave; vested RSUs you already own are yours to keep.
- Vested stock options typically expire 90 days after your last day unless your plan says otherwise.
- Exercising NSOs triggers ordinary income tax on the spread immediately, even before you can sell.
- The 2026 AMT exemption is $90,100 for single filers and $140,200 for married couples, per the IRS.
- Read your plan document first, because exercise windows and acceleration clauses vary widely by employer.
About the Author: Jeff Judge, CFP®, AEP®, ChFC®, CLU® is Managing Partner of Chesapeake Financial Planners in Forest Hill, Maryland. He has been helping families and business owners in Harford County and the Baltimore metro area navigate equity compensation and job transitions since earning his CFP® certification in 2013, by using Chesapeake Financial Planners’ signature process, the R.U.D.D.E.R. method™. Jeff has watched smart people walk away from six figures of value simply because they did not read their grant agreement until their last week on the job.
You just got an offer from another company. Better role, better comp, real growth. Then you open your equity grant details and see it: a large block of unvested RSUs you will forfeit if you leave, plus vested options with a clock already ticking. Suddenly the career move got complicated. The choices you make in your last 60 days at your current employer and your first 90 days after leaving can mean the difference between capturing hundreds of thousands in value or watching it evaporate.
What Happens to Each Type of Equity When You Leave?
Not all equity is treated the same when you resign or get laid off. Here is the breakdown, because the rules differ sharply depending on what you hold.
Unvested RSUs are forfeited. Restricted stock units that have not vested are gone the day you leave. If you have $200,000 in RSUs vesting over the next two years and you leave today, you forfeit that $200,000. It does not matter that you have been there five years or that vesting is "just one more month away." Rare exceptions exist, such as acceleration clauses in an acquisition or special layoff severance, but the default rule is forfeiture.
Vested RSUs are yours. Shares that already vested sit in your brokerage account as actual stock you own. Leaving does not change that. The only question is whether to hold or sell, and that is a portfolio concentration decision, not an equity decision. If a single stock makes up 30 to 40 percent of your net worth, Jeff Judge often tells clients to trim and diversify rather than make a bet on one employer's future.
Vested stock options face the 90-day window. When you leave, you typically have 90 days to exercise vested ISOs or NSOs. Miss the window and they expire worthless. The catch is cost: exercising 20,000 options at a $10 strike runs $200,000 before any tax. Read the section below before you decide.
ESPP shares are usually yours, but check. Employee Stock Purchase Plan shares you already bought are typically yours to keep. An open purchase period usually terminates when you leave, and your contributions are either refunded or used to buy shares pro rata. Plan documents control, so read them.
What Should I Do After My Startup Gets Acquired?
Why Is the 90-Day Exercise Window So Stressful?
Ninety days sounds like plenty of time to exercise stock options after leaving. It is not, because the window forces a six-figure financial decision during the most chaotic stretch of a career transition.
You need cash immediately to pay the strike price times the number of shares, which is often $100,000 to $500,000. For NSOs, taxes hit the moment you exercise: you owe ordinary income tax on the spread between strike price and fair market value, even if you cannot sell the shares yet. For ISOs, exercising can trigger Alternative Minimum Tax, adding tens of thousands to your bill before you have realized a dollar. According to the IRS, the 2026 AMT exemption phaseout begins at $500,000 for single filers, which means high earners exercising large ISO blocks often lose the exemption entirely.
Liquidity makes it worse. If your company is private, you might exercise and then hold illiquid shares for five to ten years with no exit. You are locking up cash with no timeline. And you are doing all of this while unemployed, relocating, or ramping up at a new job. This is the part of the unvested equity conversation that catches people off guard, because the forfeiture decision is simple while the exercise decision is not.
How Do I Decide Whether to Exercise or Walk Away?
This is not a simple yes or no. Run it as a four-step framework before the clock forces a rushed call.
Step 1: Calculate the all-in cost. Add the exercise cost (strike price times options), the tax cost, and the opportunity cost of tying up that cash. For NSOs, the tax cost is the spread times your marginal rate. For ISOs, model the potential AMT.
Step 2: Assess company viability and liquidity. Exercising options in a company that later fails means you spent six figures on worthless shares. If the company is private with no IPO timeline or secondary market, ask whether you can afford to lock up cash for years.
Step 3: Compare to your new compensation. If your new role includes a large RSU grant, walking away from unvested equity at your old employer may be rational because you are replacing it. Do not assume late-stage and early-stage equity carry the same risk.
Step 4: Run the upside scenarios. Model what the shares are worth if the company doubles, stays flat, or goes to zero. The decision looks different when you see the full range instead of only the optimistic case. This is where the R.U.D.D.E.R. Method™, Chesapeake Financial Planners' six-step planning process of Review and Recognize, Uncover and Understand, Design and Develop, Discuss and Decide, Execute and Empower, and Reassess and Refine, keeps an emotional decision grounded in numbers.
Here is a worked example. Say you hold 20,000 NSOs at an $8 strike, current fair market value $20, and a 40 percent combined marginal rate. Exercise cost is $160,000. The spread is $240,000, so tax owed is roughly $96,000. Total cash needed: $256,000. The honest question is not whether the stock might rise. It is whether spending $256,000 right now would create financial stress you cannot absorb.
What happens to my finances after a liquidity event?
What happens to my stock options when I leave my company?
Frequently Asked Questions
How long do I have to exercise stock options after leaving my job?
Most plans give you 90 days from your last day to exercise vested stock options, after which they expire worthless. Some employers offer extended windows of up to ten years, and layoffs sometimes carry different terms. Your grant agreement controls, so read it before you give notice.
Do I lose my RSUs if I quit?
You lose unvested RSUs when you quit, because they are forfeited the moment you leave. Vested RSUs that already converted to shares are yours to keep and sit in your brokerage account. The dividing line is the vesting date, not your tenure or how close the next vesting milestone is.
What taxes do I pay when I exercise stock options after a job change?
For NSOs, you owe ordinary income tax on the spread between strike price and fair market value at exercise, even if you cannot sell the shares. For ISOs, exercising can trigger Alternative Minimum Tax. According to the IRS, the tax treatment depends entirely on whether your options are ISOs or NSOs.
Can I negotiate to keep my unvested equity when I leave?
You can sometimes negotiate, especially during a layoff or a high-stakes departure. Acceleration of unvested shares is occasionally granted in severance packages or acquisition scenarios. The default rule is forfeiture, so any exception must be written into your agreement. According to FINRA, terms vary significantly by employer.
Should I exercise stock options in a private company before I leave?
Exercise in a private company only if you can afford to tie up the cash for years and you believe in the company's exit prospects. Private shares are often illiquid with no clear sale timeline, so you may hold them for five to ten years. Model the downside before committing six figures.
What happens to my ESPP shares when I change jobs?
ESPP shares you already purchased are typically yours to keep after you leave. Any open purchase period usually terminates on your last day, and your accumulated contributions are either refunded or used to buy shares pro rata. Check your specific plan documents, because ESPP rules vary by employer.
If you are weighing a job change with significant equity on the line, our guide to navigating sudden money and liquidity events walks through the decisions in depth. Download it at chesapeakefp.com to map your equity strategy before the 90-day clock starts ticking.
Disclosures
The information provided is for educational purposes only and should not be construed as investment advice. Investment strategies should be tailored to individual circumstances, risk tolerance, and goals. Past performance doesn't guarantee future results. Consult with qualified financial professionals regarding your specific situation.
Advisors associated with Chesapeake Financial Planners may be either (1) LPL Financial Registered Representatives offering securities through LPL Financial, Member FINRA and SIPC, and investment advisor representatives offering investment advice through Great Valley Advisor Group; or (2) solely investment advisor representatives offering investment advice through Great Valley Advisor Group and not affiliated with LPL Financial. Great Valley Advisor Group, and Chesapeake Financial Planners are separate entities from LPL Financial.
