Transcript
Hi, everyone. Welcome to today’s webinar. I am Kelly Albert. I am a wealth advisor for Mercer Advisors, and I’m incredibly excited to have you join us today to walk through how to plan for your Broadcom RSU vesting periods, as well as within the trading policies. So let’s get started.
The reason why our team really wanted to make this outreach is because this moment really matters for you and your family. If you have worked for Broadcom for any tenure of time, the RSUs and the equity based plan is an incredibly important part of your financial picture as well as how you and your family are building wealth. Broadcom has been a tremendous stock in terms of building and outperforming relative to the S&P500 this year and in subsequent years. So our conversation today is all around beginning with the end in mind and really focusing on as you prepare for this upcoming vesting period, how can you approach these periods thoughtfully and intentionally in a way to ensure that the strategy that you’re deploying really makes sense for you and your family, especially if you’re hoping to retire or approaching your retirement years, in the coming years ahead.
While most employees are receiving these vested shares, they also have to plan around the tax components of these vesting periods. When the RSUs vest, they are being taxed at ordinary income rates, which oftentimes leaves many families in one of three places.
Oftentimes, because the RSUs are one of the major, if not majority, components of their plan, they feel tight on cash flow because their salary is less than the RSU compensation that they’re receiving. So they’re almost cash flow tight but equity rich. So having the monthly cash flow that they need for their expenses, for their tax bills associated with these RSUs can become a challenge.
Additionally, some families have the challenge with facing large estimated payments to make sure that they’re not in a penalty situation when they do file their taxes.
And then thirdly is some families have a significant tax bill at the end of the year and are trying to decipher the source of funds to pay for those taxes, or they’re cringing, trying to determine what they’re gonna have to pay at the end of the year, and they’re flying blind in terms of planning.
These are the types of areas that our team is working hand in hand with Broadcom employees to ensure that they have a cohesive and intentional plan on the taxes as well as the RSUs. Understanding there’s been some new introductions from Schwab, in regards to being able to withhold 37% of the RSU value on a quarterly basis beginning this March. Another conversation point to determine, does it make sense to have that level of high withholding? Is it most prudent to do so? How does that impact other areas of your situation? These are all types of conversations that we’re helping families decipher in regards to their RSUs that go far beyond just the investment conversation.
The other item as we think about the reality at hand beginning this vesting period is being very mindful of those trading windows and trading restrictions.
Because the trading window is scheduled to open after Broadcom’s earnings report based off of the trading policy details we have on the screen, we do have a very confined and limited period to act, act both for the RSUs as well as to the concentration that employees have accrued.
If we’re not proactive when it comes to planning around RSUs, which does happen to many families, oftentimes what we have found is the concentration begins to balloon even without knowing it or even without receiving additional RSU grants and vests.
As you can see from the presentation, and graph that we’ve shared here is an example of a Broadcom employee who started with 25% of her portfolio being in Broadcom in February of 2023.
And just in pure growth alone, given the substantial growth that we’ve seen in Broadcom, more than 50% of her overall portfolio was now Broadcom.
We’ve had these conversations with many Broadcom employees where they have continued to receive RSUs. They’re working hard. They’re head down. They’re helping their kids get through college. And the next thing they know, they have two to twelve million in Broadcom, and that’s the majority of their wealth, and they’re not really sure which way to go.
Oftentimes, as we find families in this situation with such concentration risk, one thing that is incredibly important to understand is what helped you build wealth can also create significant risk as you approach or enter retirement.
This has been very apparent, I think, over the last twelve months as we’ve seen through June of last year. We saw the Broadcom share price hit an all time high, of which through some of the tumultuous volatility that we’ve seen out of 2025 into 2026, we’ve seen drastic shifts in terms of the valuation of Broadcom’s share price. So as an active employee, your opportunity to act must be done very intentionally and thoughtfully in a very confined period of time due to the trading policies and the trading restrictions as well as the trading windows that you must take action within.
When the restrictions no longer apply and when you, you know, move on from your chapter of working with Broadcom, there’s a lot of other strategies that our team can bring to bear because you’re no longer subject to those restrictions. So as you’re looking at, you know, how the equity based compensation, you know, is functioning for you and your family, it’s incredibly important to evaluate the options that are prudent while you are currently employed and being proactive and beginning with the end in mind while also having a very disciplined and intentional and thoughtful strategy around how do you transition from an active employee, to a retiree of Broadcom, and what strategies and approaches from an investment perspective, from a tax perspective, from a cash flow perspective makes sense for you and your family that there’s a unified strategy to maximize and protect the wealth for you and the people that you care about most.
When it comes to evaluating which strategy is the right approach or what makes the most sense for your family, it needs to be a tailored and customized approach because every family situation is different.
But most importantly, coming back to that theme of beginning with the end in mind. It’s critically important as we’re working with families who are still active employees of Broadcom. They are typically in their peak earning years. They’re in the top tax brackets. Because of that, we really wanna be mindful of not accelerating realizing capital gains when you’re in these top peak tax brackets. So we don’t want to be realizing more capital gains than necessary because we have an understanding that once you make a transition from Broadcom, there’s oftentimes ways for us to be very aggressive in nature of rotating you out of that concentration risk to give you broad exposure to other areas of the market and being able to do that in a tax neutral fashion.
So as we look at the tools in our toolkit and looking at which tailored approach makes sense for each and every family, the right combination of strategies really depends on, you know, the family’s goals, what their employment status is, what their tax situation is, what they’re hoping to accomplish, what lifestyle they’re looking to achieve now as well as in retirement. And once we understand what you and your family are hoping to achieve, we can understand and determine what is the most effective way to get there and what tools in the toolkit best apply to your project that we can help you with.
Given that our team has the privilege and pleasure to partner with many Broadcom employees, we thought it might be helpful to share a few case studies just to give an example of some of the families that we’ve had the opportunity to support in navigating just what you’re living today. So we had a Broadcom employee approach us several years ago who was hoping to transition into retirement in the coming years.
He was very concerned about his reliance on the Broadcom valuation. He had shared with me that he was getting hit with incredibly high tax bills. And if he could retire, he was interested in understanding would he be able to potentially look at a second home purchase.
So as we began working together with him, we found that about 90% of his financial assets were concentrated in Broadcom. Again, was receiving those RSUs ongoingly and not selling them, was just receiving them as shares, and they had grown very substantially, of which he did not want to sell due to the tax implications and and lack of understanding of what he should invest in if he was to sell Broadcom.
So what we did with his family is we sat down and we ultimately understood what were we trying to plan for, what did that retirement lifestyle look like, and how did we start beginning with the end in mind with his upcoming RSUs since there was natural liquidity in shares coming on an ongoing basis, as well as how did we man manage the current concentration that he already, you know, joined our team with. As we went through the planning process, we were able to identify the opportunity to assist him in a strategic charitable giving strategy, which allowed him to reduce his taxes over the next two years by a $102,000 of his federal tax liability.
We also were able to help him reduce his Broadcom exposure by over 25% in a tax efficient fashion, as well as, most importantly, help him with that second home purchase that him and his family were incredibly excited about, and have very intentional plans about as we prepare for his retirement, what strategies we will deploy upon his official retirement from Broadcom of which he’s no longer required to follow those trading restrictions or trading windows.
So again, beginning with the end in mind, being very thoughtful about how are we planning for each of his quarterly RSUs as we prepare for an upcoming transition, making sure we’re being very mindful about his current tax brackets, the tax brackets he will be in upon his retirement, as well as some of the sophisticated strategies that we can utilize to transition the remaining amount of his concentrated Broadcom position in a tax neutral way when he ultimately decides to retire from Broadcom.
While we support active Broadcom employees, we also have experience in supporting Broadcom employees who have already retired. A lot of families come to us when they have realized that they really have no clear path in terms of how to address the major concentration that they recruit as a part of their long tenure with Broadcom. So in this case study, this is really speaking to how we were able to help a retiree who came to us with over four million dollars, in a concentration of Broadcom. The average unrealized gain was over 1,300% in terms of capital gain of the shares that he held for over 11,000 shares.
So as we met with his family, what we understood was that as much as they understood that Broadcom was a very strong vehicle to build and compound wealth to allow them to transition into retirement, they became very unsettled around the reliance on the valuation of Broadcom, especially given some of the volatility that they saw across the share price over the last several months.
As we sat down with this family and understood more of around what their retirement lifestyle looked like, what they were hoping to achieve with their family, different gifting that they had in mind for their children and their grandchildren, one of the opportunities that we recognized was the ability to manage that four million dollars Broadcom concentration in a tax neutral fashion. So in looking at the opportunity to do this because he was no longer required to adhere to Broadcom’s trading policies and restrictions, we were able to deploy a long short strategy that allowed us to incrementally and intentionally unwind the Broadcom position that he held and allowed us to reduce that concentrated position by over 40% in six months.
And we were able to do that in a tax neutral fashion, meaning that we were able to lock in the Broadcom profits, again, that huge unrealized gain that he had, while allowing him to diversify and receive exposure into other areas of the market where he continued to have exposure to upside potential in different stocks or equities outside of Broadcom, locking in the profits without locking in the huge tax bill that he would have otherwise had to pay if we weren’t using a sophisticated strategy like we deployed for him and his family. Now given the concentration that we were able to minimize for him in a tax neutral way and reposition to a strategy that gave him and his wife more comfort around what gave them the peace of mind when their head hits the pillow at night, they know they’re in a good place, allowed our team to ensure that they weren’t taking on unnecessary risk, allowed them to enjoy their retirement and provide that peace of mind that they were yearning for, and also to allow them to do that without having to pay significant tax bills to address that concentration.
As we partner with different Broadcom employees, it’s incredibly important that we’re optimizing every area of your benefit offerings. So whether it’s the RSUs on a quarterly basis, the employee stock purchase plan, the backdoor mega Roth that’s available to you all, It’s really around focusing on how do we use the equity compensation plan that you have to really maximize it for what’s most important to you and your family while managing risks, managing taxes, and ensuring that you have the context and clarity to make informed decisions around the different components of your compensation plan with Broadcom. As you’ll see on this slide, one of the major components is really tax optimization.
As you have these RSUs continue to vest throughout the year, as you’re reaching some of those top tax brackets, quite frankly, the only returns that you care about are the ones that you get to keep. And most of the Broadcom families that we meet, taxes are their biggest expense on an annual basis. It is the number one line item for their families. So having a very intentional strategy around how to manage taxes, how to be very thoughtful in tax efficient strategies, tax efficient planning, improving your cash flow in a tax efficient fashion is incredibly important from a planning perspective for you and your family.
You know, our team often says that poor tax planning will take more returns away from your family than the market ever will, and that is why tax optimization is one of the number one reasons that we’ve had such success in partnering with your Broadcom colleagues is being able to help them navigate these very complex situations and giving them peace of mind that they’re not having their hard earned wealth eroded to having additional payments go to Uncle Sam.
And then lastly, on this slide, touching on the customized financial planning. Again, everything starts with a plan to understand what is your purpose, what priorities do you and your family have. Once we understand what we’re trying to accomplish, we can help you and your family determine what is the most effective way to do so from an investment perspective, from a tax perspective, for your cash flow. Really having a unified team to bring it all together for you so that you have the context and the clarity to make informed decisions around how to maximize the benefits that you’re receiving from Broadcom.
As we conclude our presentation and time together today, if you take anything away from this webinar, my hope is that you’ll have a conversation to understand what’s possible without pressure for you and your family. If you are currently a Mercer Advisors client, I highly recommend that you’re scheduling time with your wealth advisor to make sure that you have a strategy and plan for this upcoming RSU vesting period. If you’re not currently a Mercer Advisors client, please do not hesitate to reach out to us. Please use the form that we’ve shared today to schedule a time to simply have a conversation to understand what’s possible, to have context and clarity around how to make informed decisions for your family as we prepare for this next vesting period.
Thank you so much for the time today. I’m hopeful that this information was valuable to you and your family. We look forward to engaging with you and your family soon, and we look forward to future webinars. Thank you so much.
