Equity Compensation Planning

Services

Make deliberate decisions about restricted stock, options, purchase plans, and the concentrated position they create, before the vesting calendar makes them for you.

Three tall palm trees against a vivid blue sky

Vesting is automatic. The decisions are not.

Equity compensation is where many Conejo Valley households build the largest part of their wealth, and where the most consequential decisions are made by default. Shares vest and are held because nothing prompts a sale. Options approach expiration. Withholding at vest turns out to have covered less than the tax due. A single employer comes to represent a large share of the family’s net worth, alongside the paycheck that depends on the same company.

Palm Coast helps you treat each grant as a decision: what it is worth after tax, when it should be exercised or sold, how it fits your cash needs and your concentration limits, and how it interacts with the rest of your plan. The tax dimension is coordinated with your CPA, and for insiders, with counsel.

Schedule a Meeting

What the work covers

The grant types and the decisions each one raises

Restricted stock units

RSUs are taxed as ordinary income when they vest, and the standard withholding often falls short for higher earners. The decisions are whether to hold or sell at vest, how to cover the tax gap, and how much company stock to keep in total.

Stock options

Incentive stock options can trigger the alternative minimum tax when exercised and held; nonqualified options are taxed as ordinary income at exercise. Timing, exercise method, and coordination with other income determine the after-tax result.

Employee stock purchase plans

A discounted purchase plan is often worth participating in, but the holding period and the difference between qualifying and disqualifying dispositions change how the gain is taxed. We help you decide how much to contribute and when to sell.

Concentration and trading constraints

Company stock, unvested awards, and the salary itself are all exposed to one employer. We set a concentration target, plan the path to it across tax years, and for officers and insiders coordinate with counsel on pre-arranged trading plans and blackout periods.

How Palm Coast approaches it

A calendar, a tax plan, and a concentration target

Inventory the grants

Every award goes into one view: type, grant date, vesting schedule, exercise price, expiration, and current value. Alongside it sits the household’s cash needs, other income, and total exposure to the employer.

Set the rules

We agree on a concentration limit, a default action at vest, an approach to option exercises, and how the tax on each event will be covered, then check the plan with your CPA for the current year’s bracket and AMT exposure.

Execute on the calendar and revisit

Decisions are made ahead of each vesting and expiration date rather than after. New grants, job changes, and changes in the stock price or the tax law prompt a review of the rules.

See what to expect

Who equity compensation planning is for

This work is for executives, professionals, and employees of public and private companies who receive a meaningful share of their compensation as equity, including people at the large employers headquartered in the Conejo Valley, and for founders and early employees of private companies approaching a liquidity event. It is especially valuable when the equity has grown to a large share of net worth.

Palm Coast does not prepare tax returns or provide tax or legal advice; the tax treatment of each award is confirmed with your CPA, and insider trading constraints with your company’s counsel. Equity planning connects to investment management for the diversification path and to tax mitigation strategies for the timing questions.

Frequently asked questions

Should we sell RSUs when they vest?

Vesting is a taxable event whether or not you sell, so holding after vest is equivalent to buying the stock that day at that price. The question is whether you would choose to buy that much company stock; for most households with significant unvested awards and a salary from the same employer, the answer argues for selling at least part at vest and diversifying. The right proportion is specific to your plan.

Why did we owe more tax than was withheld on our RSUs?

Employers commonly withhold at a flat supplemental rate that is lower than the top marginal federal rate, and California withholding may also fall short for higher earners. Large vesting years can leave a gap. Equity planning estimates the true liability with your CPA and sets aside or sells enough to cover it.

How do incentive stock options and the alternative minimum tax interact?

Exercising incentive stock options and holding the shares creates no regular income tax that year, but the spread between the exercise price and the market value is an adjustment for the alternative minimum tax and can produce a large AMT bill. Exercising in stages, exercising early in the year, and coordinating with other income are common approaches; each is evaluated with your CPA.

How much company stock is too much?

There is no universal threshold. Palm Coast considers your total exposure to the employer, including unvested awards and the paycheck, against the rest of the plan and your capacity to absorb a fall in the stock. Most households set a target well below what they hold and reach it over several tax years to manage the cost of selling.

Insights

Authoritative sources

These official resources support the general educational context on this page. They are not endorsements of Palm Coast Wealth Management.

Bring the moving parts into one conversation.

Use the secure meeting form to tell Palm Coast what you are coordinating. Do not include account numbers or other sensitive financial information.

Schedule a Meeting Call (805) 429-4183