Executive Share Ownership Guidelines and Stock Retention Requirements 2020

This article is from the Ayco Compensation & Benefits Digest May 15, 2020 edition. Share ownership guidelines for executives continue to be a common feature at an overwhelming majority of U.S. public companies. The basic premise of mandating ownership of company stock is that the interests of senior management will more closely align with those of shareholders. We have been tracking the design of share ownership guidelines at Ayco corporate partners for the past 27 years. In the early 1990s,...

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The Equity Compensation Planning Dilemma For Corporate Executives

Geoffrey M. Zimmerman, CFP® This article was first published at myStockOptions.com. It is kindly reprinted here with permission. Executives, as corporate insiders, face both planning concerns and potential landmines in their equity compensation. Your actions are highly visible, and you must perform a delicate balancing act to meet the needs, demands, and perceptions of the various constituencies interested in your company's stock. This article, which complements my other article on myStockOptions.com, looks at these concerns along with ways to manage...

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Equity Comp. Advisor Marketing Video

  This video for engaging stock plan participants illustrates StockOpter's unique analytics. It's a video version of the "5 Things You Should Know About Your Employer Stock and Options" flyer. It can be used to promote a firm's equity compensation guidance capabilities. Net Worth Strategies collaborated with FA Client Machine to create this video as part of their Turnkey Video Library for financial advisors. These videos provide a fast, easy, and effective way for advisors to engage both clients and...

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"Under Water" Doesn't Necessarily Mean "Drowned"

The following article was written by financial advisor John Olsen over 10 years ago.  At the time, the stock market like now had been hit with a substantial correction.  Company stock and option holdings had lost considerable value and many recipients believed the loss was permanent.  However, we all know the stock market recovered leading to the longest and biggest bull market on record.  So John's sage advice back then regarding providing equity compensation guidance bears repeating given the current...

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Market Volatility and Employee Stock Option Values

  The stock market has been on a roller coaster the last few weeks, but in general the S&P 500 index is not far from its all time high. Consequently, most employee stock options granted in the last ten years are likely to still be significantly "In-the-Money" (current stock price above the grant price) as illustrated by the above chart. This chart shows the S&P 500 over the past decade. It can be used as a general representation of the...

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Key Findings From E*TRADE's Annual Stock Plan Participant Survey

Here are the key findings from the E*TRADE 2019 survey of stock plan participants. Stock plan benefits drive participants’ perception of ownership and recognition: 59% say "my stock plan provides me with a sense of ownership in the company" 59% believe "My contributions to my company’s performance are acknowledged through the equity grants I receive" Participants require assistance with understanding how their stock plan benefits work and potential tax implications: 59% understand their vesting schedule 53% understand how their stock...

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Survey Says Stock Plan Participants Need Advisor Assistance

According to new research from Schwab Stock Plan Services, the average vested value of U.S. workers’ equity compensation is $97,711 and the average total value of their equity compensation is $149,835. The study, which examines the attitudes and behaviors of 1,000 equity compensation plan participants who currently receive employee stock options or restricted stock awards and/or participate in employee stock purchase plans (ESPPs), finds that 59% of respondents have NOT exercised or sold at least some of their equity compensation...

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Insight Ratio: The Stock Option Exercise Secret

Determining the right time to exercise and sell  one's employee stock options is the key to maximizing the value of this benefit. Stock options are granted at a fixed grant price that must be exercised after vesting and prior to the expiration date to realize their value. During the time between vesting and expiration (usually 10 years after the grant date) the current stock price for publicly traded companies will generally fluctuate significantly and no one can predict the peaks...

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Age, Gender, and Stock Plan Participant Attitudes

As one of the first surveys to report statistics by gender as well as age, the recently released biennial Fidelity Stock Plan Services Participant Survey highlights a unique opportunity for advisors to provide equity compensation guidance and education to not one, but two niche groups. Women While 66% of men reported understanding their stock plans “very well,” only 48% of women reported the same. When asked if they were aware of the tax implications of selling the stock in their...

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Maximizing Restricted Stock Awards

Financial advisor and StockOpter user Megan Gorman in her Forbes article How A Restricted Stock Strategy Can Maximize Your Wealth has some great tips for restricted stock recipients. Megan explains "Restricted stock is simply shares issued to an employee that cannot be transferred to them until certain conditions have been met. These conditions can be time- or performance-based." However she continues, "while restricted stock creates great upside potential, if employees do not know how to manage the risks, they might...

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