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Here’s the latest news, tips and information for financial advisors that help clients with the diversification of their company stock and options.

Helping Clients Get More From Their Equity Compensation: Companies grant more than $110 billion in equity awards every year, and many have concerns about how much employees value these awards.  UBS research across industries and service providers found that two out of three participants do not place significant value on the equity awards they receive.  However, this misperception can be corrected by taking three simple steps.

Proposed Legislation Encourages Broad Use of Equity at Private CompaniesRecent bills introduced in the House and Senate would make it easier for startups and private companies to give employees an equity stake in their company’s success.  These bills are aimed at encouraging non-publicly traded companies to grant broad based stock options or stock settled RSUs (Restricted Stock Units) to employees with increased flexibility for paying the taxes owed.  Under the current law, employees generally pay taxes in the year they exercise options or when their RSUs vest, but this bill would allow them to defer those taxes for up to seven years as explained in this article.

Employee Stock Options Today: Richard Friedman from the Ayco Company describes the history of stock options and the results of their updated survey of the design features of these programs. While options remain a relatively common long-term incentive award, they no longer are the primary award for executives at most U.S. public companies. Yet, options continue to be the most utilized compensation mechanisms at pre-IPO start-up companies where they are a means of sharing future growth of the company with most or even all employees without having to distribute cash.

New Articles on the StockOpter University: 

Modeling Diversification Strategies: The 2016 tax update of StockOpter Pro was released in April with several enhancements for modeling 10b5-1 and other diversification strategies.  If you haven’t taken a look a StockOpter Pro lately checkout the free demo and the updated users guide.

Other StockOpter News:

  • The StockOpter Support FAQs have been converted to WordPress and completely updated.  The new platform for Frequently Asked Questions is separated into different categories and can be easily searched for answers.  Need to know the difference between StockOpter Pro and StockOpter.com?  Search StockOpter.com Overview.
  • We are constantly updating our tools with new ways to facilitate equity compensation diversification and reinvestment decisions. We’re currently working on a new “owned/long” share diversification table, chart and dashboard in StockOpter.com that will help users to project and compare strategies to reduce concentrated company stock positions. The next edition of this news brief will provide more information on this enhancement.

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