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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Black Scholes and Employee Stock Option Education

IMAGE: iqoncept, 123rf.com Net Worth Strategies has been providing financial advisors with employee stock option risk analysis and tax planning tools since 1999 so it has witnessed firsthand a great deal of the development in employee stock option education. Here's a brief synopsis.... The internet bubble (1995 - 2000) instigated many companies to begin offering broad-based stock option programs. These companies had to provide participants with basic information about their stock option grants because options were new and mysterious. This...

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NQSO No No

IMAGE: Gemma Evans/UnSplash.com Too often I hear from financial advisors that their clients are considering exercising their non-qualified employee stock options (NQSOs) early (i.e. several years prior to expiration) and holding the shares for at least 1 year to get long term capital gains tax rates when they sell the shares. This may seem like a reasonable tax strategy, but it really isn't and here's what clients need to know. Unlike Incentive Stock Options (ISOs), NQSOs are NOT tax advantageous....

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Workers Report They Hold Large Percentages of Company Stock

IMAGE: Andriy Popov /123rf.com A new survey from Schwab Stock Plan Services reveals that equity compensation accounts for a significant portion of participants’ net worth, with many employees’ portfolios having a concentration in company stock. According to the nationwide survey conducted in July 2018 of 1,000 stock plan participants who receive employer stock and options, company equity accounts on average for approximately 30 percent of employees’ net worth. Millennial employees have an even greater share of their net worth in...

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Performance Awards: 3 Truths... and a Lie

Recently, Fidelity Stock Plan Services and ClearBridge Compensation Group assessed the alignment between Performance Awards and a company’s performance. Accessing data and researching deep into company grant practices and Performance Award payouts, they specifically looked for factors which impacted the pay‑for‑performance relationship to help determine whether or not an ideal mix of equity vehicles exists. For this study, ClearBridge analyzed Performance Award Data collected from Fidelity Stock Plan Services for two hundred Fidelity clients with share-based Performance Awards that had...

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First Equity Compensation Advisor Conference Provides Needed Expertise

IMAGE: myStockOptions Organized by myStockOptions.com and held in Boston on June 18, the one-day conference Financial Planning for Public Company Executives & Directors attracted financial advisors from all over the United States that work with or seek to advise clients that receive equity compensation from their employers. The first of its kind conference featured the following presentations from a variety of stock compensation industry experts: Leading Investment Manager Reveals Current Strategies for High-Net-Worth Clients (Paul Bouchey, Parametric Portfolio Associates, interviewed by Bruce Brumberg of myStockOptions.com) Trends...

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Engaging Gen X & Y Clients: 5 Steps Applied to Stock Compensation Guidance

IMAGE: Rawpixel / Unsplash In an article from Financial Advisor Magazine, financial services marketing strategist Gail Graham points out that Gen X and Y are very different consumers than Baby Boomers. She says they are more inclined to comparison shop for value propositions, prices, products and the types of client experience they want. Consequently, these potential clients will be highly influenced by the massive advertising campaigns from the large "direct-to-consumer" financial services companies. Independent advisors will have a hard time competing with large "robo"...

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Four Financial Ideas on Your Work Anniversary

By David C. Gratke, Principal at Gratke Wealth, LLC It’s another work anniversary and a good time to reflect on where you are in your career both professionally and financially. It couldn’t be a better time to also take stock of where your overall financial plan is currently, and whether or not you are on track to make work optional. Here are four smart financial ideas to consider on this work anniversary. 1) Rule of 1/3rds- Your work anniversary often...

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Restricted Stock and Restricted Stock Unit Utilization Today

From the Ayco Compensation & Benefits Digest, July 2017 While performance‐based awards have become the most common long‐term incentives granted to executives at most companies today, so‐called “full value” awards, including restricted stock or restricted stock units (“RSUs”), remain a common equity award. (See our March 2017 Digest for data on the current mix of long‐term incentive (LTI) awards). We have noted not only a marked shift away from restricted stock to the use of RSUs and more recently, based...

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Six Trends in Performance Awards

IMAGE: Przemyslaw Koch / 123rf.com Barbara Baksa, Executive Director of the National Association of Stock Plan Professionals (NASPP) identifies six trends in the usage of performance awards, from the 2016 Domestic Stock Plan Design Survey, co-sponsored by the NASPP and Deloitte Consulting. Trend #1: Performance awards are on the rise for executives. Over the past four survey cycles, we’ve seen a more than 100% increase in the use of performance awards at the NEO and senior executive levels. For NEOs,...

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