Equity compensation

Equity compensation is traditionally the largest creator of wealth for a public company executive. While cash compensation is great, it usually funds lifestyle expenses. Ultimately, the long-term wealth of an executive comes from their ongoing receipt of various stock awards, including options, restricted stock grants, restricted stock units and/or performance shares.

Each award structure has its own set of characteristics and tax outcomes, but it is paramount that advisors serving this market have tools to help frame effective decisions around equity compensation to ensure the client is maximizing the value of each award. Executive Consulting of Raymond James created a proprietary analysis tool, TRITON^℠, which is designed to do just that. TRITON^℠ utilizes the specifics of an executive’s outstanding awards and provides analysis to aid in determining the best course of action over the life of each award.

This analysis is customized for each client and includes stock option exercise timing and methodologies (including stock swaps), 83(b) elections, net unrealized appreciation, among other topics. The review incorporates the impact of decisions on taxes, cash flow, concentration risk and regulatory reporting requirements so that each executive can map out the best plan for their unique circumstances.