Company-owned stock and stock options are assets that may generate significant wealth. They may also pose one of the largest risk to future financial security. This risk reward tradeoff is inherent to investing and yet it can be heightened as one’s concentrated stock position increases. In truth, the value of […]
concentrated equity
Five Steps to Managing Concentrated Equity in Company Stock and Stock Options
Concentrated equity, also known as owning a large position in one company stock, can exist in many forms. One form of concentrated equity may be the result of working for an employer who has issued stock ownership via restricted stock and stock options. These types of stock ownership and stock […]
Using After-Tax Value to Evaluate Liquidation Priority of Concentrated Equity
Concentrated equity can be defined as owning a substantial position in one company’s stock. For such concentrated positions, one risk for a single owner may be a lack of diversification*. Or said another way, having too many eggs in one basket. However, concentration risk may not be a bad thing. In fact, […]
Strategically Liquidating Concentrated Stock from a Tax Perspective
One rule of thumb regarding the ownership of company stock suggests that 10-15% of your total net worth may be a suitable allocation. 10-15% allows an employee or shareholder to participate in the upside of the company should the stock appreciate and, perhaps more importantly, be somewhat insulated from the […]
