Employee Stock Ownership Planning

WEALTH MANAGEMENT

Employee Stock Ownership Planning Services

Stock options and restricted stock units (RSUs) are an essential part of your employee compensation. Time and taxes play a pivotal role in getting the most out of these benefits. We want to ensure you are utilizing them in the most efficient manner possible. Let us build you a custom financial plan that includes these unique benefits so you can choose how you want to use your company stock.

Restricted Stock Units (RSUs)

Think of your RSUs like a pre-determined bonus in your compensation package offered by your company. Except, rather than receiving money, you receive shares of company stock. Similar to a bonus, new RSUs are awarded annually, and larger RSU grants may be offered when employees are promoted. Shares typically vest quarterly or annually and are deposited into a brokerage account for the employee. Once the employee acquires the shares, known as vesting, the employee’s cost basis is established for those shares. RSUs can usually only be sold during a brief trading window pre-determined by the company issuing the shares. Careful planning should be done before selling your RSUs for the first time. Once you choose an accounting method to sell your shares, you must continue that method for the rest of your time with that company. You can choose between three different accounting methods, and dependent on your immediate need for cash and tax rate, which way you choose is pivotal to using your RSUs efficiently.

Employee Stock Options

Stock options are a common incentive found in today’s compensation packages. Employers offer company stock to their employees, typically at a steep discount, to encourage long-term relationships with their employees. Like an RSU award, vesting schedules allow employees to purchase the shares at different times in the future pre-determined by the employer. Unique to stock options, though, the tax treatment received on those stock options is determined by how long you own them. A few key terms are necessary to understand before deciding what to do with your stock options. Grant dates and prices, exercise dates and prices, and when you execute the purchase and sell the discounted shares affect the return you get on your investment. Stock options are an essential benefit in your compensation package, and we want to make sure you get the most out of your employee benefits.

If you want to make changes to your ESOP and utilize your RSUs or Stock Options efficiently, please do not hesitate to contact a member of our team. We have the experience and tools necessary to make a clear decision on what to do with the company stock you have worked so hard to earn.