We help clients navigate the complexities associated with the various types of equity compensation, such as; Incentive Stock Options (ISOs), Non-qualified Stock Options (NSQO), Restricted Stock Units (RSUs), and Employee Stock Purchase Programs (ESPPs).
How can I make the most of my equity compensation?
Navigating Incentive Stocks Options (ISOs)
We build a customized plan with each client to help lower concentration risk while balancing tax efficiency and Alternative Minimum Tax (AMT) exposure. Tax-loss harvesting and direct indexing can offset capital gains after meeting the holding period with ISOs.
Optimizing Employee Stock Purchase Plans (ESPP)
These plans can present an opportunity to increase your income. Additionally, if your company’s stock has had high growth, or if you own legacy positions from an ESPP, it’s essential to execute a well-thought-out plan. This is because the tax impact can vary greatly depending on the holding period and the stock price at various periods throughout the ESPP plan.
Designing 10b5-1 Plans
These plans can be an effective way for executives to diversify out of company stock on a predetermined schedule. Careful considerations should be made while setting up these plans, including volatility or lack of liquidity in the underlying stock and potential impact on your taxes.
83(b) Elections & Qualified Small Business Stock (QSBS)
These have the potential to provide significant tax savings. It is vital to understand when you qualify for an 83(b) election, make the election with the IRS, and navigate the rules surrounding QSBS.