Stock compensation, also called as Equity compensation, refers to various noncash remuneration received as part of a pay package. Examples include stock options, restricted stock units, employee stock purchase plans and more. In addition, equity compensation can be given to employees and sometimes outside service providers (contractors, advisors, directors, consultants), which provides an ownership stake in the company.

Stock options can create a major liquidity event that transforms your financial life. Often, stock compensated employees attempt to do their own analysis, without professional guidance, and end up with costly tax and negative investment results.

A plan that worked for your coworker may not work for you because your tax situations are probably different. The best option for you will depend on your current tax bracket and your financial circumstance. To maximize the opportunity, it’s critical to get the right team of advisors in place before making irreversible decisions with your shares.

At AlphaPlus Wealth Management, we give you the information you need to make the decisions that improve your financial health and help you build wealth.

We discuss your goals to identify how to best utilize stock options in your financial plan or retirement plan, develop an exercise strategy with an analysis to consider tax implications (like the alternative minimum tax) and risks of holding a concentrated stock position, develop a liquidation strategy, factoring in risk, cash needs, and taxes.