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Financial Planning

Annotated diagram of Schedule DTax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.

Financial Planning: Diversification

Want to learn more about financial planning for equity compensation? Visit our podcasts page for interviews with some of our expert contributing authors.
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Articles

Your Company Stock: The Importance Of Diversification This is premium content

Podcast included! Through the author's personal example, this article presents the dangers of a concentrated stock position, discusses why diversification may be hard for employees with shares from equity compensation, and explores strategies for preserving your net worth.

How To Diversify Your Company Stock Holdings While Leveraging The Wealth In Your Stock Options & Other Equity Grants This is premium content

Once you have settled on a comfortable ownership percentage of company stock in your combined holdings, how do you decide which shares and options to hold and which to sell?

The Equity Compensation Planning Dilemma For Corporate Executives This is premium content

Podcast included! Executives must carefully balance the demands of many constituencies interested in their company's stock. Explores ways to manage these pressures while achieving financial goals.
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How To Avoid Mistakes And Create Wealth With Your Stock Options This is premium content

Podcast included! Stock options can be very lucrative if handled properly, but there are situations in which people can easily make mistakes. In this article I discuss the most common mistakes I see.

Stock Option Strategy To Diversify Away Your Company Stock Risk This is premium content

Podcast included! While you may have great faith in your company's stock, you also need to diversify your investment portfolio. For employees with stock options, doing this successfully requires a careful analysis to figure out the optimal times to exercise and sell.

How To Develop A Stock Option Exercise Strategy To Reach Your Financial Goals (Part 1) This is premium content

Podcast included! One of the most vexing investment decisions you will ever make involves when to exercise your stock options and when to sell the shares. This article series will give you the tools for determining that time.

Stockbrokers' Secrets: Company Stock Diversification This is premium content

The biggest challenge I face when counseling my clients is convincing them to avoid owning too much of their company's stock. Tales about employees of Lehman Brothers or Enron who lost their entire net worth have shaken these clients to attention.

Stockbrokers' Secrets: Retirement Planning With Stock Compensation (Part 1) This is premium content

Podcast included! Many of my clients do not see stock compensation in the bigger picture of retirement savings and withdrawal plans. Considering net worth, age, and company stock plan, I present the client with these core points about stock grants, 401(k) plans, nonqualified deferred compensation, and IRAs.

Tax Strategies With Stock Options, Restricted Stock, And Deferred Compensation This is premium content

Having both nonqualified stock options and nonqualified deferred compensation gives you a tremendous amount of flexibility to optimize your financial planning and tax situation. In this article, I explain how I have used the two plans in concert with one another.

The Risks And Rewards Of Company Stock

Morningstar.com
Experts disagree on what the "proper" amount of company stock is. Figure out how dependent you are on your company's stock, the different places you own it, and whether/how you can diversify.

FAQs

What is a concentrated stock position, and what can I do to protect myself and get cash for other purposes? This is premium content

A concentrated stock position occurs when a significant chunk of your net worth is tied up in a single stock. Strategies for hedging, diversification, and liquidity include...

How do I diversify my company-stock holdings? This is premium content

Diversification is a sound practice in building and preserving personal wealth. If, along with stock options, you also own your company stock outright, settle on a comfortable ownership percentage...

What are the risks of owning my company's stock?

When you retain shares acquired through stock compensation or an ESPP, you are subject to the advantages and disadvantages of being an owner of the company. By owning stock, you are subject to both market risk and...
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NEW! What is a post-vest holding period? This is premium content

A post-vest holding period is a specified length of time after you receive shares from an equity grant during which the company requires you to...

When should I sell my company stock? This is premium content

While we can't give you specific advice on this, we can give you some guidance on how to think about the answer either on your own or with a financial advisor...

UPDATES! Can my company set ownership guidelines for company stock? Any survey data about their use? This is premium content

Stock ownership guidelines specify how much company stock you must own in total or as a multiple of salary. Most companies count in the calculation the...

UPDATES! Can my company require me to retain a certain amount of company stock from a stock option exercise or a restricted stock grant? This is premium content

Although stock ownership guidelines are more common, retention mandates and requirements for CEOs and senior executives have become popular, as shown by survey data and corporate proxy statement disclosures. Supporters of share retention rules believe they show...