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A performance award is a grant of company shares or units in which the recipient's rights in the shares or units are contingent on the achievement of pre-established performance goals, and restricted until the end of a set performance period. At the end of the performance period, the company will determine if the performance goals originally outlined when the performance award was granted have been achieved. If these goals have been met or exceeded, the company may adjust the awarded number of shares accordingly. performance awards may also involve an additional vesting period at the end of the performance period. Once these vesting requirements have been met, an employee owns the shares or cash outright and may treat them as they would any other share of stock or cash in their account.
If your performance awards are vested, payment will be made to you or your estate as set forth under plan rules. With respect to awards that have not yet vested, there are usually special rules in the event you retire, die or become disabled. See your employer's plan rules for details.
Depending on your employer's plan rules, the vest date of your performance award may be the same as your performance end date.
Depending on your company's plan rules, vesting requirements may be met by the passage of time, or by company or individual performance. If you do not meet the requirements set forth by your company prior to the end of the vesting period, your awards are typically forfeited to the company. Vesting may occur prior to the vesting date shown, contingent upon your company's satisfaction with your compliance with the company's performance criteria.
Depending on your employer's plan rules, the vest date of your performance award may be the same as your performance end date.
A payment date is the date for actual payment to you under your company's plan.
Once your award vests, your rights become non-forfeitable. You will receive actual payment according to the payment date under your company's plan.
Depending on your employer's plan rules, the vest date of your performance award may be the same as your performance end date.
Once the holding period has been met, the shares or cash equivalent (depending on plan rules) of company stock continue to be held as shares, and are not automatically deposited into your Fidelity Account. Once the shares have vested, you may be required to pay statutory minimum taxes, but since you've deferred receipt of payment to a later date, you can put off paying your remaining taxes. You will not own the shares outright until they are distributed to your Fidelity Account, based on your plan's rules.
If you leave your employer prior to the date your performance award vests, typically you forfeit your award. Check your company's plan for details.
Depending on your employer's plan rules, the vest date of your performance award may be the same as your performance end date.
The Summary page for performance awards displays information about grant totals, unaccepted grants, and accepted grants. From this page, you can view detailed information about a particular performance award, view your performance end date and your vesting and payment dates (if applicable), accept or decline unaccepted performance awards, or select a tax withholding method which will take effect at the time taxes are due for an accepted performance award.
You can view performance end dates, vesting schedule information (if applicable), and grant details including awards pending achievement and payment, and the award's current estimated value.
The total value of performance awards is equal to the previous day's closing price of the stock times the total number of awards pending achievement and awards pending payment, but not including unaccepted grants. Note that this value is not the same as the fair market value for federal income tax purposes.
The fair market value for federal income tax purposes is the value of the award at the time taxes are withheld. Fair market value is specified in your performance award agreement, and is used to determine the amount of income treated as compensation for federal income tax purposes. Your company's performance award plan rules determine how fair market value is calculated for your performance awards. The calculation may be based on prior business day's close, average high and low for the day, real-time price, or the current day's close.
For accepted grants, select View Details. On the View Details page, click View Plan Document or View Grant Agreement. You can also view your plan document and grant agreement when you accept or decline an unaccepted grant.
The plan document and grant agreement are in PDF format. You must have the free Acrobat® Reader® to view and print the plan document.
You can view a history of all transactions for your performance award plan for the past 10, 30, 60, 90, or 120 days. Transactions appear in reverse chronological order, but you can also sort the list of transactions by transaction type, grant ID, grant date, or quantity. You can view details pertaining to accepted and declined grants.
For transactions older than 120 days, view Statements/Records under Accounts & Trade > Portfolio on Fidelity.com.
See Accepting and Declining Grants for details.
Under normal federal income tax rules, an employee receiving a performance award is not taxed at the time of the grant. Instead, the employee is taxed at vesting, unless the plan allows for the employee to defer receipt of the cash or shares. In these circumstances, the employer has certain withholding obligations which may or may not cover the entire tax liability for the employee at vesting or payment. Payment of all other taxes can be deferred until the payment date, when the employee actually takes receipt of the shares or cash equivalent (depending on the company's plan rules). The amount of income subject to tax is the difference between the fair market value of the grant at the time of vesting, minus the amount paid for the grant, if any.
For grants that pay in actual shares, the employee's tax holding period begins at the time of payment (which may or may not coincide with vesting depending on the plan rules), and the employee's tax basis is equal to the amount paid for the stock plus the amount included as ordinary compensation income. Upon a later sale of the shares, assuming the employee holds the shares as a capital asset, the employee would recognize capital gain income or loss; whether such capital gain would be short- or long-term depends on the time between the beginning of the holding period at vesting and the date of the subsequent sale. Consult your tax adviser regarding the income tax consequences to you.
Depending on plan rules, you have three options to meet your tax withholding obligation:
Tax withholding is calculated based on the total fair market value of your grants at the time of the tax withholding (less the amount you paid for the shares, if any) multiplied by the tax withholding rate supplied by your company. You must have funds available in your Fidelity Account to satisfy the withholding obligation. The withholding will be sent to your employer for tax payment.
Click Estimate Gain to estimate your tax withholding obligation. Enter your grant data to estimate taxable income and tax withholding.