Stock Option Planning

Learn about how we manage incentive stock options and nonqualified stock options to help you grow and protect your wealth, reduce your taxes, and achieve your personal goals.

“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!”

Benefits of Stock Option Planning

Planning for stock options and other compensation provides you and your loved ones many benefits:

  • Control over the amount of risk you want to take
  • Choice and control over when and how much you pay in taxes
  • Confidence in your long-term personal financial plans
Control your

Investment Risk

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).

As a general rule, if you want to make a bet on your company, make it with your lowest cost investment.

Your cost is usually zero for

Stock Options

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.

Your cost is usually small for

RSUs: Restricted Stock Units

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

Your cost is usually 85% of the share price for

ESPP: Employee Stock Purchase Plan

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. 

Our Process for Stock Option Planning

Discovery

Focusing on your unique personal plans and what money means to you.

Inventory

Take an inventory of options and more. Usually, stock options are one part of a compensation package. We gather all the info.

Forecast

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.

Implementation

Assist with any trades, transfers, cash distributions and other details necessary for you to achieve your financial goals.

Monitoring

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.

Client Story

Carlos and the Corvette

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.

We:

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.

Investment Services We Provide

Investment Advice

Asset Allocation & Portfolio Management

Balance the risk and reward between investments to achieve your real-life financial goals.

Stock & Stock Fund Investments

We build high-quality, actively-managed equity portfolios using academically-proven techniques.

Stock and Stock Fund Investments
Concentrated Equity Owner Guy Espresso

Concentrated Equity Strategies

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.

Single Stock Diversification

Learn how we build an investment portfolio around your large equity position and help you diversify—not double-down (or worse) your risk.

Single Stock Diversification
Tax and Estate Planning

Bond & Fixed Income Investments

Learn how our team makes recommendations for the portfolio we call “Foundation Income.”

Hedging Strategies & Alternatives

Learn how we carefully select some alternative investments to provide income and growth for some clients.

Hedging Strategies
Investment Performance Analysis

Investment Performance Analysis

Learn how we perform investment performance analysis and provide our clients access to this information, on demand, with great technology.

IRAs: Roth, Rollover, Inherited and More

Learn how we solve the complex problem of providing retirement income and reducing income taxes.

Financial Planning
Annuity

Annuities of All Kinds

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.

401K Advice for Individuals and Businesses

Learn how we provide retirement plan advice for our clients 401k accounts, and for employers who want to provide advice to their employees.

401k Advice

Learn more!

An initial conversation with one of our experts is always free of charge.

Talk with an Expert

An initial conversation is always complimentary. We are often told that our discovery process is the best conversation about money a person has ever had.

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Exit Planning

Our financial planners guide our clients through the infinite maze of investments, taxes, budgeting, saving, estate planning, college planning, all types of insurance questions, and other planning issues.

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