“We feel blessed because we work for such a great company and completely stressed out about what to do about taxes, investments and our financial plans!”
Planning for stock options and other compensation provides you and your loved ones many benefits:
Owners of stock options often are of two minds. They want to reduce their risk and they are confident in their company.
See further: Concentrated Equity Planning
Here are some rules of thumb for stock option owners. If you have options, you likely have other forms of ownership in your company, like restricted stock units (RSUs) and or an employee stock purchase program (ESPP).
Depending on your personal situation, options may be a strategic way to make a bet on your company. You are given the options, you may continue to be given stock options, and the cost to you is zero. If the company’s share price goes to zero and you lose everything—it cost you nothing.
When an RSU vests, you must pay the taxes. Usually enough RSUs are sold to cover your tax burden. If the taxes withheld are not enough for your unique situation, you may have a small tax burden to pay. Thus, RSUs are more expensive than options for you. Work with your financial advisor to discuss the pros and cons of selling RSU’s
Employee Stock Purchase Programs almost typically give the owner a 15% immediate discount to the share price of the stock on a given day. Work with your financial advisor to discuss the pros and cons of selling ESPP. In some cases, the best decision is to sell the ESPP as soon as, or shortly after, the vesting date to realize the 15% gain as soon as possible.
Focusing on your unique personal plans and what money means to you.
Take an inventory of options and more. Usually, stock options are one part of a compensation package. We gather all the info.
Planning and tax forecast. We put together a tax forecast, including helping you assure the lowest tax obligation, and enough money set aside to pay the taxes.
Assist with any trades, transfers, cash distributions and other details necessary for you to achieve your financial goals.
Ongoing reporting and monitoring of your company’s equity as well as all of the holdings in your accounts. Plus, planning for your 401k, your budget and other financial planning—all integrated and easy to understand.
Carlos started out at a huge engineering firm in the financial controls department. It was his dream job until he saw a friend of his driving a Corvette. Curious, he asked, “How could you afford such a cool car?” His friend told him about a start-up technology firm and Carlos applied there. Within a few short years the company went public and Carlos had options, restricted stock units, an employee stock purchase plan, and a lot of stress too. He found us through a referral from a person who knew our expertise.
Completed a fun discovery meeting.
Took an inventory of all his financial assets, current and expected.
Forecast his vesting schedule as well as his tax obligations
Created a personal financial plan
Helped with the trading, transfers and tax management
Gave him permission…to buy that Corvette!
Carlos says, “I felt blessed and stressed.” Now Carlos feels a lot less stress because he has a plan for taxes, a stock option plan, and confidence in his personal financial plan. Plus, Carlos has a sweet new Corvette—which he can afford—thanks to his planning and his good fortune.
Balance the risk and reward between investments to achieve your real-life financial goals.
We build high-quality, actively-managed equity portfolios using academically-proven techniques.
If you have a large amount of your net worth in the equity of a single company, learn how to reduce your risk, reduce your taxes, protect and grow your wealth.
Learn how we build an investment portfolio around your large equity position and help you diversify—not double-down (or worse) your risk.
Learn how our team makes recommendations for the portfolio we call “Foundation Income.”
Learn how we carefully select some alternative investments to provide income and growth for some clients.
Learn how we perform investment performance analysis and provide our clients access to this information, on demand, with great technology.
Learn how we solve the complex problem of providing retirement income and reducing income taxes.
For some clients, an annuity may provide a safe and prudent retirement income. We have independent, expert annuity agents with a huge array of providers to choose from.
Learn how we provide retirement plan advice for our clients 401k accounts, and for employers who want to provide advice to their employees.
An initial conversation with one of our experts is always free of charge.