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What You Should Know About Your Employer Stock Options

1-Minute Video:

If you receive employee stock options or restricted stock units from your employer congratulations! These forms of equity compensation can create wealth and help you achieve your financial goals. However, this wealth is at risk due to stock price fluctuations and employment changes. To manage these risks, there are 5 things you should know about your employer stock and options that aren’t included in your stock plan education resources. Number one is Forfeit Value. This is the current equity value lost by leaving your company to work elsewhere prior to retirement. This amount includes the time value of your vested and unvested options and the value of any restricted shares. Number two is Leverage. This is the upside and downside values of your options and shares at hypothetical price increments. This illustrates potential versus risk. Number three is Option Ratios. These are the time value of your options as a percentage of the full value. They help determine the order and urgency for exercising and selling your stock options. Number four would be Concentration. This shows the values and percentages of your company stock and options holdings compared to your diversified investments. This is important because concentrated equity compensation holdings are risky. And the fifth, Financial Goal Attainment. This is the current status your equity compensation plays in achieving a financial goal. Once you have secured your financial goal in a diversified portfolio, you can take more risk holding your stock and option. Equity compensation is complicated, but we can provide you with these insights and information that aren’t available from your company. Give us a call today. We’ll help you make informed decisions to get the most out of your company stock and option holdings. NOTE: Assisting clients to diversify and reinvest their equity compensation is an extremely lucrative opportunity for financial advisors that can provide unique insights regarding these holdings. The analytics illustrated in this video were calculated by StockOpter.com from Net Worth Strategies, Inc. Unlike general financial planning tools that are designed for retirement planning, StockOpter determines when and why clients should diversify their company stock and options. For more information and a short overview video visit: https://stockopter.com/

Jim Barlow

OakTree Premium Finance


Leveraged Retirement Strategist