Have you thought about the right time to exercise your corporate stock options?

With all of the technology firms in the Pacific Northwest, many of our clients have compensation plans that include considerable stock options.  These plans can be tricky and complicated to navigate on your own, but we have spent years fielding questions regarding these plans.  Some of the most common questions we encounter include: “My company is offering Stock Options or Restricted Stock Options, what is the difference and which one should I select?”; “When should I exercise my options?”; “Can you help me cover my exposure?”

One of our clients came to us once she had accumulated a significant number of options resulting in a meaningful dollar amount. The stock had performed well in recent years, and she was unsure whether or not to diversify or keep all of her assets in one stock. 

We first created a financial plan to help evaluate her required rate of return for her family’s liquid net worth. We needed to know what type of return was necessary in order to support her retirement plan. After we reviewed her financial plan, our client did not have the necessary wiggle room to lose a significant amount on these options.

We provided her with the necessary information to make an educated decision. After evaluating the potential possibilities of all outcomes and the preferences of our client, we advised her to exercise most of the options, sell the stock and realize the growth. 

Location

Seattle, WA

Service(s)
  • Client Goal

    Understanding company stock option plan

  • Years with Freestone

    7 years

  • Actual

    Realized stock growth

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