Sonja and David

Equity Compensation


39 & 45


Finding ways to maximize equity compensation, reduce risk, and minimize taxes

Equity compensation case study

The Challenge

Sonja and David seem like a couple who has done everything right when it comes to their careers and their finances. They’ve worked for some of the top technology companies in the world, accepting both high pay and equity compensation as an incentive to stay on board. As a result, they have plenty of assets and big account balances. But underneath the facade, plenty of uncertainty grows.

While Sonja has worked for several start-ups over the years, she now works for a Series D Unicorn that hasn’t quite gone public. She wants to maximize her incentive stock options, but she knows there are tax ramifications to consider and she isn’t quite sure how to sell since the company isn’t public.

David, on the other hand, has continued working for one of the biggest tech companies in the world —a company that offers him high pay and restricted stock units. Every year, he struggles over the tough decision to sell or hold his position, but he cannot figure out how much risk he faces either way.

Sonja and David want to continue working hard in their careers, but they also want to make sure they’re utilizing every advantage afforded to them. The couple hopes to set aside some of the funds harvested from equity-based compensation in order to purchase their dream home, but they also want to minimize their tax bill.

While the pair shares their finances and their lives, they also know that that their situations aren’t entirely the same —and that different strategies may be suggested for each of them. Ideally, they hope to uncover a comprehensive wealth and tax planning approach that plays to the strengths and weaknesses of each of their financial positions. Ultimately, that’s why they turned to us for help.

The Approach

Step One:

Sonja and David sat down with our financial team to discuss and evaluate their financial health and potential next steps.

Step Two:

We talked over Sonja’s situation and spent some time assessing the true value of her stock options so we could determine if she had the capital necessary to act on them without disastrous tax consequences. Once she was ready to move forward, we introduced her to one of our partnering firms who helped her find a buyer who could help her turn stock-based compensation into cash.

Step Three:

David couldn’t quite decide what to do with his restricted stock units on his own, so we helped him determine the downside risk holding this position posed to his overall portfolio. Once he was ready to relinquish some of his stock, we connected him to a trusted CPA partner who specializes in equity compensation. This professional had plenty of suggestions to help him prepare for his looming tax bill.

Step Four:

Thanks to their new cash flow, our wealth planner and portfolio manager were able to rerun their financial plans to help them create a roadmap to use their newly created opportunity to meet their goals.

The Results

It didn’t take long for Sonja and David to begin realizing the fruits of their labor.

Once their company stock had been liquidated, they were able to take advantage of their newfound liquid assets to invest in other opportunities.

Not only that, but the couple was able to reduce the risks associated with holding so much of their wealth with their employers. After connecting with professionals who could help them liquidate their equity compensation, intelligently navigate their tax impact, and free up cashto invest, they now know they’re making the most of all the hard work they put into their careers.

Most importantly, Sonja and David no longer have to wonder what their financial future holds. They have a framework and a roadmap to follow as well as the peace of mind you can only gain from knowing you’re taking a strategic, professional approach to reach your goals

See how RHS Financial Can Help You Navigate your Equity