Equity Compensation Part 2: How Different Plans Work

Doug Fabian

Senior Vice President

Jennifer Baick

MBA, CFP®, CDFA Senior Director, Financial Planning Group

August 10, 2020

Summary

If you work for a company that offers stock options, a discounted stock purchasing program, or some other type of equity compensation, how do you decide whether it’s the right choice for you?

In this second installment of a three-part series, Jennifer Beck of Mercer Advisors digs into specific benefits and potential drawbacks associated with the four main kinds of equity compensation plans. She and host Doug Fabian also shed light on:

How various plan types are taxed, and ways to optimize your tax situation
Examples of “bad behavior” to avoid when participating in an equity compensation plan
The risks associated with becoming over-concentrated in a single company stock
Strategies for selling off highly concentrated equity compensation positions to help diversify your investment portfolio
Why you may want to consider gifting highly appreciated stocks to charitable organizations, donor-advised funds, or your loved ones

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