Targeting the Emerging Affluent? Consider Junior Executives!

IMAGE: Ali Morshedlou / Unsplash Lower level company executives/managers (i.e. Vice Presidents and Directors) that receive stock compensation should be on your prospect radar if they aren't already.  These employees often fall into what can be described as the "emerging affluent" which is a hot new opportunity if you know how to serve them. Emerging affluent clients (assets under management [AUM] between $100,000 and $250,000 and under 45 years of age) will grow to high-value AUM over time through career advancements and wealth transfers....

More

Highlights of the 2014 Domestic Stock Plan Admin Survey

IMAGE: Iqoncept / 123rf.com The 2014 Domestic Stock Plan Administration Survey was developed jointly by the National Association of Stock Plan Professionals (NASPP) and Deloitte Consulting LLP from March 2014 to May 2014 and was administered by Deloitte Consulting LLP. Last published in 2011, this survey provides a detailed look at the administrative practices of companies primarily headquartered in the United States (U.S.).  The database consists of 494 survey respondents. The participant responses reflect the most recent trends offered by...

More

The Current Mix of Long-Term Incentive Awards

by Richard Friedman from the Ayco Compensation & Benefits Digest Virtually all large and most medium size companies utilize long-term incentive awards (LTI) as the third leg of executive compensation alongside salary and annual bonus awards. The value of such awards continue to represent a significant portion of the compensation paid to senior corporate executives. However, we continue to see a shift in the types of grants being awarded as the concept of “pay for performance” expands further in the world of...

More

An Unintended Downside of 10b5-1 Plans

by Jennifer Namazi, Editorial Director, NASPP May 14, 2015 - http://www.naspp.com/blog/2015/05/an-unintended-downside-of-10b5-1-plans.html It’s been about 15 years (yikes, already?) since the SEC adopted Rule 10b5-1. For those new to the concept, a 10b5-1 plan may be best explained as a device that allows company insiders to trade in the company’s securities pursuant to a pre-arranged trading plan or instruction. The pre-arranged element is intended to help the insider avoid automatic liability for insider trading and serve as an affirmative defense to...

More

Avoiding IRC 83(b) Election Pitfalls – the Devil Is in the Details

IMAGE: crstrbrt / 123rf.com By John Lau CPA, CFP, RIA When stock options are exercised at vesting, there are immediate income tax consequences. For the exercise of nonqualified stock options (NQSOs), it triggers the recognition of ordinary compensation income to the extent of the excess of the stock’s fair market value at the time of exercise and the exercise price. For incentive stock options (ISOs), although no income is recognized for regular tax purposes, it nevertheless would create alternative minimum...

More

How Post-Vesting Periods Play Havoc with Unplanned Retirement

IMAGE: nyul / 123rf.com "A variety of actions will help Eileen face an unplanned retirement." By Chuck Steege, CFP, CEP Eileen is the general counsel of a high tech company. Her company was just acquired by an out-of-state company.  The sad fact is that all headquarters personnel are at risk of being let go. At age 60, she faces unplanned retirement along with many of her colleagues. As a high-potential employee, she did everything right, from planning to accumulation.  Eileen...

More

Set It and Forget It Doesn't Work for Employee Stock Options

IMAGE: Wavebreak Media Ltd / 123rf.com By John Lau CPA, CFP, RIA Exercise now or later? Buy, sell, or hold? How do I avoid AMT tax? Should I understand all of the documents I signed? These are the questions people constantly ask about their employee stock options. They are very good questions, and the answers are not always simple. Managing your stock options is very important. Traditionally, employee stock options were granted to top management as a way to align...

More