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Here’s the latest news, tips and information for financial advisors with clients that receive company stock and options.
Current Mix of Long Term Incentive Awards: This article from the Ayco Compensation & Benefits Digest reviews the long-term incentive award practices of 325 Ayco corporate clients, updating a similar study conducted two years ago. The value of such awards continues to represent a significant portion of the compensation paid to senior corporate executives. However, a shift in the types of grants being awarded continues to unfold as the concept of “pay for performance” expands further in the world of executive compensation.
Targeting the Emerging Affluent: Lower level executives can often fall into what can be described as emerging affluent clients. These clients with assets between $100,000 and $250,000 and under 45 years of age are expected to accumulate more wealth in the future whereas high-wealth clients (assets over $1 million) are harder to win and will likely begin drawing down their assets soon. This piece outlines the service delivery methods that are necessary to efficiently serve emerging executives simultaneously.
Modeling Company Stock Diversification Strategies: If your clients or prospects are asking stock compensation diversification questions that you can’t answer, take a look at StockOpter.com and StockOpter Pro. StockOpter.com creates a “snapshot” analysis and StockOpter Pro models strategies using a 15 year horizon and different price indices. Here’s a link that describes and compares these programs: https://stockopter.com/comparing-equity-compensation-analysis-tools/. They will enable you to attract new clients and reoccurring assets under management.
Advice for Stock Option Recipients from StockOpter Users:
- Set It and Forget It Doesn’t Work for ESOs: by John Lau, CPA, CFP
- How Post Vesting Periods Play Havoc with Unplanned Retirement: by Chuck Steege, CFP, CEP
- Avoiding IRC 83(b) Election Pitfalls: by John Lau, CPA, CFP
Highlights of the 2014 Domestic Stock Plan Admin Survey: This comprehensive survey conducted jointly by the National Association of Stock Plan Professionals (NASPP) and Deloitte Consulting LLP from March 2014 to May 2014 reflects the most recent trends in equity compensation plans offered by U.S. companies.
What Happens to Employee Stock Options at Divorce: If you weren’t sure, here’s a great article that explains the taxation of a divorce-related transfer of vested employer stock options from an employee spouse to a non-employee spouse pursuant to a divorce property settlement.