I’m Daniel Zajac, CFP®

I write about employee stock options and equity compensation in a way that is easy to understand.

Rethinking Whether to Exercise and Hold Non-Qualified Stock Options for Long-Term Capital Gains

When it comes to evaluating strategies to exercise your Non-Qualified Stock Options (NQSOs), what is your best plan of attack? Do you: Exercise and sell all your NQSOs immediately, cashing out the full proceeds? Exercise your NQSOs and hold shares of stock, hoping the stock price will go up? Or, leave your NQSOs unexercised and hope the stock price will go up? If you anticipate a higher stock price in the future…

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Concentration Risk and Your Equity Compensation: Reasons and Rebuttals

Concentration risk is an issue of interest to nearly every employee, executive, business owner, or anyone else holding company stock and employee stock options. What is concentration risk? It’s loosely defined as holding a significant portion of wealth in a single stock, which could result in an inappropriately diversified portfolio. Unfortunately, the ambiguity associated

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The 10b5-1 Plan: 8 Frequently Asked Questions and Recent Updates

If you’re an executive or an employee with significant equity in your company from employee stock options, restricted stock units, or other stock grants, you may have a continual need to sell stock. However, SEC regulations, company insider trading policies and fears of allegations of insider trading may prevent proper diversification of holdings. Fortunately for executives and insiders, Rule 10b5-1 trading plans can allow flexibility to sell stock without regard to limitations imposed by company insider trading policies while complying with SEC regulations. Such plans also provide an affirmative defense to allegations of insider trading.

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Simplifying the Equity Compensation Complexities: Keep it, Spend it, or Save it

If you’re wondering how to maximize the value of your incentive stock options (ISOs), non-qualified stock options (NQSOs), restricted stock units (RSUs), or other forms of equity compensation, you’re not alone. After all, there is plenty to think about if you’ve been granted equity compensation. You may dream of how to strike it rich. You may fear you’ll do something wrong and miss out. You might become mired in taxing technicalities, including AMT calculations. All that thinking can backfire if “TMI” (too much information) prevents you from proceeding.

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Why Exercising Incentive Stock Options When the Stock Price is Down May Not Be Your Best Strategy

Wouldn’t it be great if your company stock price only ever went up—especially if you’re participating in its growth through incentive stock options (ISOs)? Unfortunately, that’s not always how the world turns. If the share price goes down instead, you may be bummed to see the value of your incentive stock options is less than what it once was. However, a down stock price might mean that you could score some tax breaks if you exercise and hold some of those ISOs. When the price is down, the move might help minimize alternative minimum tax (AMT).

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What Equity Compensation Shares Are the Best to Contribute to a Donor Advised Fund? Part 2

To achieve this win-win ideal, it’s important to be deliberate about which equity compensation share lots you donate, as well as whether you donate them as post-sale cash proceeds, or unsold shares. We concluded that cash isn’t necessarily king when donating to a DAF. Directly donating low basis, long-term shares usually reigns supreme.

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