PostHog Handbook Library / People

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# Stock options

Auto TL;DR

## At a Glance

This long page covers these main areas. The list is generated from the article headings, so it updates with every handbook rebuild.

1. Overview
2. Frequently asked questions
3. What is a stock option?
4. What does it mean to "exercise" a stock option?
5. What are my stock options actually worth?
6. What if I leave PostHog before this exit event happens?
7. Are there any tax issues I should be aware of?
8. US stock options

### Overview

It’s important to us that all PostHog employees feel invested in the company’s success. Everyone plays a critical role in the business and deserves a share of that success as we grow. When employees perform well, they contribute to the business doing well, and therefore should share in the increased financial value of the business.

As part of your compensation, you will receive an option to purchase stock in the company, subject to a standard 4-year vesting schedule with monthly vesting and a 1-year cliff. Broadly, the number of shares subject to your option depends on your Level. We may adjust this policy over time depending on our hiring pace – for example, if there is an extended gap in hiring, we may revise the allocation.

While the governing terms of the options may vary if PostHog is ever acquired, we have set them up with the following key terms:

- 10 year exercise window from the date of grant in the event that you leave PostHog.
- Double-trigger acceleration, which generally means if you are let go or forced to leave in connection with the company being acquired, all unvested shares subject to your option will immediately vest.
- Vesting starts from your start date, not after a “probation period” or similar.
- For UK-based team members, eligible options are granted under an EMI scheme and/or a CSOP scheme, both of which can be tax-advantaged.

It can take time to formally approve and issue options, as it requires a board meeting and updated company valuations. We can provide estimates of the likely issuance timeframe at the time of hiring, but generally speaking, we try to get formal board approval a few times a year. In any case, you will not be disadvantaged by any delay in the approval process, as vesting always starts from your PostHog start date.

### Frequently asked questions

We have written out a few of the most commonly asked questions about stock options below. Some of these questions are useful if this is your first time receiving options, while others provide more detail. If you have specific questions, please reach out to Hector. However, note that these questions are often highly individualized, and as such, we may suggest that you consult with your own personal tax advisor for tailored guidance.

#### What is a stock option?

A stock option gives you the right to purchase shares of PostHog's stock at a predetermined price set on the date of the grant, regardless of what the market value of the stock is in the future.

Stock options can be financially very lucrative, because PostHog will give you the opportunity to buy stock at the grant-date fair market value, which may be lower than what investors or an acquirer may be willing to pay in the future at a liquidity event. As we continue to grow the company, we hope that the value of our stock will exceed the exercise price on your options, which could result in substantial financial upside to you and the rest of our option holders.

#### What does it mean to "exercise" a stock option?

This simply means you decide to buy the underlying stock covered by your option at the price set out in your option agreement. The price you pay is called the “exercise price” or the “strike price”; both terms are widely used and mean the same thing here. When you exercise a stock option, the exercise price is paid to PostHog as consideration for the stock you're buying.

You should be careful here, as exercising stock options can have personal tax consequences. We always recommend you consult with your own personal tax advisor before making a decision to exercise any options so that they can provide you with individualized tax advice based on your specific circumstances.

#### What are my stock options actually worth?

Because there is no public market for our stock, and because the stock is subject to standard private company restrictions on transfer, rights of first refusal, and consent requirements, it is not possible to assign a true “value” to the stock.

Although we can tell you what the last-round preferred stock investors paid and what our 409A (US) or HMRC (UK) appraisers assigned as the most recent “value,” there is no guarantee that any buyer or investor would pay those prices – even in the event of a sale or acquisition.

That being said, you can use this handy calculator to model what your options might be worth in the future, under certain assumptions about liquidity, sales price, dilution, etc. You'll need to make a copy first, and be signed in with your PostHog email address. You can also find estimates in your Employee page in the PostHog Ops platform.

Since these numbers are based on assumptions, we cannot promise you that value, but in any case it can give you a sense of what the stock may be worth.

#### What if I leave PostHog before this exit event happens?

Happily, we have set up terms that are industry-leading in their friendliness to team members! If you leave PostHog, you will have 10 years from the date your stock option was _granted_ to exercise any vested portion. Note that the exact deadline you have for exercise is whatever is written on your stock option agreement under "Expiration Date".

The industry standard is to give only 90 days to exercise after leaving, which we believe is overly restrictive.

#### Are there any tax issues I should be aware of?

You should always consult with your own tax advisor before making decisions about exercising your options. That being said, there are a few important tax issues we want to highlight here that may apply if you live in or are a taxpayer in the US or the UK.

##### US stock options

To the extent legally possible, we grant stock options to our employees as Incentive Stock Options (ISOs), which can be tax-advantaged assuming the following two holding period requirements are met:

- You must not sell the underlying stock until at least 1 year after exercising; and
- You must not sell the underlying stock until at least 2 years after the grant date.

If you do not exercise the option within 3 months of leaving, you still keep the stock option to the extent vested, but any non-exercised portion will legally convert into a Non-qualified Stock Option (NSO), which does not have the same tax advantages. Generally, no tax is payable upon exercise of ISOs (except for potential liability under the Alternative Minimum Tax (AMT)), whereas income tax is payable upon exercise of NSOs. US taxpayers may therefore wish to exercise stock options within 3 months of leaving to retain ISO tax benefits, though this requires paying the exercise price out of pocket and may reduce optionality.

After 3 months, if you _exercise_ (not sell) your stock options, you will be liable for income tax at exercise on the difference between the market value at exercise and the exercise price. Within 3 months, no tax is payable upon exercise (other than potentially AMT) – you will only pay tax upon _selling_ the shares (generally at a lower capital gains rate, if ISO holding period requirements are met). We can't give you personal advice here, so please consult a tax advisor to see if exercising your ISO options makes sense for you.

##### UK stock options

If you are an eligible UK taxpayer, you will be granted stock options under either an EMI scheme or a CSOP scheme, both of which can be tax-advantaged. We aim to grant employees the most tax-advantaged options possible, subject to eligibility rules. Since EMI options are generally seen as more favorable than CSOP options, we will default to granting EMI options if we are eligible to do so at such time. In the event we do not have EMI eligibility, grants will be made under a CSOP plan instead, and if we are not CSOP eligible, the grants will instead be non tax-advantaged.

EMI Options: EMI Options are similar to ISOs in that they are tax-advantaged in the UK, but the tax advantage is lost 90 days after you leave PostHog. <p>After 90 days, if you _exercise_ (not sell) your EMI options, you will be liable for income tax and potentially national insurance contributions on the difference between the market value at the time of exercise and the exercise price. Within 90 days, no tax is payable upon exercise – you will only pay capital gains tax upon _selling_ the shares (which is generally a lower rate than income tax). In addition to that, EMI's also have the added benefit that if you sell after holding for 2 years from the grant date, you may be eligible for more favorable capital gains rates due to business asset disposal relief. Again, we can't give you personal advice here, so please talk to a tax advisor if you're not sure whether exercising your EMI options makes sense for you.</p>

CSOP Options: CSOP Options are similar to EMI Options in that they are also tax-advantaged in the UK, but there are a few key distinctions:

- Unlike EMI Options, there is no requirement that the CSOP options must be exercised within 90 days of leaving PostHog to maintain tax-advantaged treatment. However, there is a separate and distinct requirement that a CSOP option must generally be held for at least 3 years from the grant date in order to be eligible for tax-advantaged treatment (this requirement does not apply to EMIs, though as noted above, holding EMIs for 2 years may also allow you to benefit from a more favorable capital gains rate). Although you technically will have the ability to exercise any vested CSOP options prior to this 3 year date, because we allow options to be exercised up to 10-years from the grant date, absent some sort of liquidity opportunity or statutory allowance, it probably doesn’t make sense for you to do so to lose out on tax-advantaged treatment.

Please check with your tax advisor if you plan to exercise your CSOP Options (especially prior to 3 years) as you may be losing out on critical tax benefits if this is done incorrectly!

- Unlike EMI Options which come with a £250,000 limit, there is a lower £60,000 limit on CSOP Options that can be granted (valued at the time of grant). The CSOP options count toward the EMI cap as well, so if you already have outstanding EMI options close to the £250,000 limit, your particular effective CSOP cap may be lower than the £60,000 maximum.
- When eligibility conditions are met for CSOP options, the tax paid upon sale is typically capital gains tax, whereas EMI options may also be eligible for additional favorable business tax disposal relief.

As with everything here, this is highly facts and circumstances specific, so please consult with your individual tax advisor to make sure you don’t lose out on any key tax benefits.

##### Other countries / non-tax favored options

At the time of grant, we check for eligibility factors and do what we can to provide tax-advantaged treatment where possible. However, not every option will necessarily be eligible for tax-advantage status (whether due to lack of company eligibility, ineligible tax jurisdiction/residence, employment requirements, caps on issuance amounts, or otherwise). Any option that is not eligible to be issued as either an ISO, EMI, or CSOP will be granted as an NSO.

Historically, we designated all non-US and non-UK grants as "ISOs" for consistency, though in practice, none of these grants were ever eligible for true ISO beneficial tax treatment under the law since they were made to non-US taxpayers. As of July 2025, we revised this practice to avoid confusion and to align with recommended best practices, and now all grants we make to non-US and non-UK service providers are issued as NSOs. NSOs are not tax-advantaged, and generally speaking, income tax will be due upon _exercise_ of the option.

In all of the above cases, your exercise price remains fixed at the time of issuance no matter what.

#### Does it make any difference how I leave PostHog – what if I am fired or made redundant?

We have taken a very broad, market-standard and team-friendly approach to what we consider for and not for "cause" in the event of departures:

- If you decide to leave, i.e. resign, your stock options stop vesting, but you maintain all vested options and you will continue to have 10 years from the grant date to exercise them (subject to the potential differences in tax treatment depending on when you exercise, as mentioned above). This departure is not considered for "cause".
- Even if unfortunately you are let go due to performance issues, fit, redundancy, etc., you still maintain your vested stock options, and you will continue to have 10 years from the grant date to exercise them (subject to the potential differences in tax treatment depending on when you exercise, as mentioned above). This departure is also not considered for "cause".
- Only in the unlikely event you are let go due to gross misconduct, fraud, causing material harm to the business, or similar issues would you forfeit your stock options (including vested shares). In such a situation, your departure would be classified for "cause".

The concept of “cause” is similar (though not identical) to the concepts of “good leaver” and “bad leaver” under UK law. We aim to align our option agreements across jurisdictions in an employee-favorable way, but note that local law classifications may not perfectly match the contractual provisions in your option agreement. As such, you should check with your tax advisor to confirm your individual circumstances.

We also have a special provision in place in case PostHog is acquired by another company and, in connection with such acquisition, you are let go without "cause". In this case "double-trigger vesting" applies, which means 100% of your unvested options immediately vest. This benefit is usually only offered to executives at startups (if at all), but we thought it was fair that everyone should benefit from this.

While we cannot guarantee that an acquirer will agree to assume these provisions without issue, including them in our option agreements gives us a strong position to advocate for maintaining them at such time.

#### What if I move jurisdictions but stay employed by PostHog?

As a remote company with global hiring practices, we often get questions about what happens to outstanding options if an employee moves to a different country. Generally, provided that your option does not cease vesting upon move due to legal requirements, you should expect them to continue vesting on the same schedule and keep the same strike price. However, the tax treatment of your options may change depending on your new jurisdiction. Not all countries recognize the same tax-advantaged schemes, so your options, or a part of them, may lose favorable tax status even though they continue to exist and vest.

You should not assume that PostHog can accommodate cancellations, re-grants, or restructurings based on personal tax circumstances or decisions to relocate. For example, if you were granted NSOs and later move to the UK where you might otherwise be eligible for EMI, your existing NSOs will generally continue as-is. We would not cancel and re-grant them as EMI options.

Given the flexibility we offer around work location, it is not operationally feasible for us to tailor equity treatment to each individual’s circumstances and decisions to relocate. If you already anticipate a move at the time of hiring, let us know. We may be able to delay your grant until after your move. However, this comes with the risk that your strike price may be higher at the time of such grant.

As always, jurisdictional moves are highly fact-specific. Please reach out with questions, but note that in many cases we may recommend seeking independent tax advice.

##### Exceptions

There are a few notable exceptions to the general approach described above:

1. EMI options and moves to EOR arrangements

If you hold EMI options and move out of the UK while continuing employment at PostHog via an Employer of Record (EOR), unfortunately this is treated as a cessation of continuous service under EMI rules. In this case:

- Your options will stop vesting immediately
- Any unvested portion will be forfeited
- To retain favorable tax treatment, you must exercise the vested portion within 90 days

In such a circumstance, since the option ceases to vest due to legal requirements, PostHog will re-grant the unvested portion as NSOs after your move, on the same vesting schedule. However:

- The strike price may differ from your original grant
- In practice, it is often higher, since UK valuations (for EMI) are typically lower than US 409A valuations, and valuations generally increase over time

We do not have flexibility on this point, so this is an important factor to consider when deciding whether to relocate, as the total number of options you ultimately retain won't change, but the economic impact to you of the change in strike price or tax treatment could be significant.

1. Broad-based changes (not individual requests)

In some cases, we may make changes that benefit groups of employees, such as canceling and re-granting options or changing option types due to regulatory or eligibility changes.

For example, if we previously issued CSOP options due to lack of EMI eligibility and later became EMI-eligible again, we might evaluate whether to make a broader change. These decisions:

- Are made at a group level, not individually
- Depend on the overall impact and trade-offs, and the pros and cons are carefully weighted
- Will not be driven by individual jurisdictional, tax or other circumstances

If a change in tax treatment or eligibility applies only to you, you should assume we will not make an exception.

#### What is "vesting"?

Vesting means that you don’t receive all your stock options immediately; otherwise, you could work at PostHog for a week, leave, and still receive a significant portion of your options.

Instead we follow the standard industry vesting schedule over 4 years:

- After 1 year, you will hit a "cliff," and 25% of your total grant will vest.
- In each subsequent month following the cliff, 1/48th of your total grant vests, so you are fully vested after 4 years.

Vesting starts on the day that you started at PostHog, not the date that your stock options were granted.

#### How did you decide the strike price that I should pay to exercise my stock options?

PostHog doesn't decide the price – we get an external company to conduct a valuation and determine the "fair market value" (FMV) of the stock. Note that this is different (and often lower) than the price from the last funding round, due to the way that the price is calculated, and due to the fact that the stock options you receive will cover common stock while investors instead buy preferred stock.

For UK grantees, similar criteria is used to determine the valuation by HMRC.

In either case, we don't have any flexibility here – if we set an exercise price lower than the FMV, this would create serious tax issues for both you and PostHog.

These valuations are typically valid for at most 1 year (US) and 90 days (UK), so we have to redo them periodically.

#### Why do we allocate stock options in batches?

Two reasons – because valuations (mentioned above) need to be re-run, and because each time we allocate stock options we need to get them formally approved by the board.

As a result, it is normal for companies to grant stock options at set intervals (e.g. 1-2 times per year), rather than individually at the exact time of hire.

#### Why don't you just give me the shares?

Under most countries' tax laws, including the US and UK, a direct issuance of stock would be considered income, and you would immediately have to pay income tax on the stock received. This would mean you getting hit with a tax bill of tens/hundreds of thousands of $$$ with no direct cash compensation to help you pay the tax liability due to the illiquid nature of the stock. Stock options are a much more tax-efficient way to compensate team members, as you don't pay tax today when you are granted the stock options, and as mentioned above, you are often able to take advantage of tax-favored schemes that can further reduce your liability.

#### Can PostHog help me figure out what tax I will have to pay in the future though?

We cannot give you personal tax advice – you need to talk to an accountant. We're happy to ask around our network for recommendations.

#### I received stock options under the EMI and/or CSOP plan as I'm based in the UK – how are these different from our regular stock options?

EMI and CSOP options have various additional tax benefits associated with them that we're able to offer because PostHog Inc. has a UK child company, Hiberly Ltd. The option is still for stock of the parent company, PostHog Inc., even though you are employed by Hiberly Ltd. Please see the section titled “UK Stock Options” above for some key differences, but as always, please make sure to consult with your own personal tax advisor for any specific questions about tax treatment.

It is worth noting that you will lose EMI and/or CSOP tax benefits if you stop being a UK tax resident.

#### How do I track my vesting and manage my options?

We use a tool called Carta to virtually manage our cap table and stock options. You can sign in to the platform using your PostHog email, and you will be able to see all of the option grants you have received, the start date and how much you have vested thus far, the strike price of your options, and how much it would cost to exercise a certain amount of options.

Non-UK employees can exercise options via Carta by sending PostHog the exercise price via ACH. Due to additional jurisdictional specific requirements in the UK, EMI and CSOP holders cannot exercise via Carta – if you are in the UK and would like to exercise, please reach out to Hector or the ops team.

#### I have a question that is not covered here!

Ask Hector or Fraser – ideally in a public Slack channel (if appropriate) for better visibility.

#### May I suggest a change to our stock option plan or my stock option documents?

Unfortunately this isn't possible – we have a standard set of agreements that we use with everyone which are pre-approved by the board and our investors. Making any changes would not be feasible, unless you spot an obvious error in your option agreement.

That being said, we do not include any terms that are not either completely standard or (in many cases) as team-friendly as possible.

Canonical URL: https://posthog.com/handbook/people/share-options

GitHub source: contents/handbook/people/share-options.mdx

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