Broker Check
5 Questions About Your Company Stock

5 Questions About Your Company Stock

| December 10, 2019

Does your Advisor Understand Your Equity Compensation Well Enough to Help you Plan it?

Let me ask you a few company stock questions:

Can Your Advisor Explain Forfeit Value? You should know the potential value of the compensation you’d leave behind if you quit or changed jobs. This includes the time value of your unvested and out of the money grants which, presumably, you’d want to replace, if you could, at your new job. We employ a tool that continuously monitors this for you;

Have You Had Upside and Downside Leverage Explained? Stock options involve leverage because of the way they are granted and priced. It’s likely, for example, that a 20% increase in the value of your company stock could produce a significantly greater increase in your equity compensation portfolio. Your advisor should be able to help you understand and pay attention to this powerful phenomenon;

When Was the Last Time You Calculated the Remaining Theoretical Value (or “TV”) of each of your equity compensation grants? As grants age, you run out of time for significant appreciation. Knowing the remaining TV will help you decide when to optimally exercise. Can your advisor track this for each of your grants and inform you when the time is right?

Do You Know How Concentrated your Wealth is? Together with leverage, concentration is the key to wealth building but it’s also the biggest risk to your net worth. Most advisors don’t really understand leverage. Having a tool for managing concentration risk is important to help assure you stay in your financial comfort zone. We can show you how much risk you’re taking;

Does Your Advisor Give You the Tools to Know at What Price do you Meet Your Financial Goal? Long-term planning is about setting goals, monitoring progress and adjusting strategy as conditions change. That’s what we call Disciplined Wealth.

Because we specialize in advising employees who receive stock options, restricted stock and other equity as part of their compensation, we use the most sophisticated, interactive tools available to build a customized plan for managing wealth. We’d love to work with you. Please leave a comment below, click on the Contact tab or call us today.


*All investing involves risk, including the possible loss of principal.  There is no assurance that any investment strategy will be successful. The return and principal value of stocks fluctuate with changes in market conditions. Shares when sold may be worth more or less than their original cost.