Equity Compensation & RSU Planning for Executives, VPs, & Directors
A single RSU vesting date can move your tax bill by five figures. Most executives, VPs, and directors find out after the fact, when the withholding turns out to be wrong and the rest comes due in April.
High Rock Wealth Management provides financial planning for executives, vice presidents, and directors whose compensation includes RSUs, stock options, deferred compensation, or other equity-based pay. You don't have to hold a C-suite title for this to apply. Directors and VPs are increasingly granted the same kind of equity compensation, and the tax decisions that come with it are similar. High Rock coordinates tax and investment strategy under one roof, which matters most in exactly this situation, where a single vesting event or option exercise decision can move your tax bill by tens of thousands of dollars. Founder Andrew Van Alstyne works directly on both the planning and the tax side of these decisions, rather than handing the tax question off to someone outside the relationship.
Equity Compensation Creates a Different Kind of Problem
Salary is simple. Equity is not.
By the time you're at an equity compensation level, a meaningful share of your net worth is likely sitting in company stock you didn't choose the timing of. RSUs vest on a schedule set by HR. Options carry an exercise decision with a tax consequence attached. Blackout windows restrict when you can trade. Deferred comp elections often have to be made a full year before the money is paid out, with no do-overs.
None of this is optional, and very little of it is explained clearly at the time you need to decide. The result is a familiar pattern: people who are excellent at their jobs and genuinely uncertain whether they're handling their own compensation well. That uncertainty is not a knowledge gap you failed to close. It's a byproduct of a compensation structure most financial advice was never built to address, and it applies just as much at the VP and director level as it does in the C-suite.
How High Rock Helps With Equity Compensation
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RSU vesting tax planning
Withholding on RSUs is often set at a flat rate that doesn't match your actual bracket, which can leave a gap due at tax time. Planning ahead of each vest date can reduce that surprise.
Coordination with company benefits and blackout periods
Every company's equity plan works a little differently. Planning around your specific plan documents and trading windows avoids decisions that look fine in isolation but conflict with a restriction you didn't know applied.
Stock option exercise timing
Incentive stock options and non-qualified stock options are taxed differently, and ISOs in particular can trigger the alternative minimum tax if exercised at the wrong time. The right timing depends on your full tax picture, not just the option grant itself.
Diversification strategy for concentrated positions
Holding a large position in one company's stock carries a different risk profile than holding a diversified portfolio, even when that company is your own employer. Strategies here can include structured selling plans and, where appropriate, 10b5-1 plans that allow for pre-scheduled trades during otherwise restricted windows.
Deferred compensation election guidance
Deciding how much to defer, and for how long, is a decision made months before you feel its effect. It deserves the same scrutiny as any other major financial decision, not a rushed answer during open enrollment.
Why This Has to Be Coordinated, Not Siloed
Most recipients of equity compensation have an investment advisor and a CPA who file taxes once a year and otherwise don't talk to each other. That gap is where equity compensation mistakes tend to live: an option exercised in the wrong tax year, a vesting event that pushes you into a higher bracket unexpectedly, a diversification sale that could have been timed better.
When planning and tax strategy happen under one roof, decisions about your equity compensation get made with the full picture in view, before the deadline forces a decision rather than after.
Frequently Asked Questions on Equity Compensation
Do I need to be a C-suite executive for this to apply to me?
No. Employees are increasingly granted RSUs, stock options, and deferred comp on terms similar to executives, and the planning challenges are the same regardless of title.
How are RSUs taxed when they vest?
RSUs are taxed as ordinary income at the fair market value on the vesting date, regardless of whether you sell the shares. Many companies withhold at a flat supplemental rate, which for higher earners often runs below their actual marginal rate, creating a gap that can come due when you file.
Should I exercise my stock options early?
It depends on the type of option, your current tax situation, and how much time is left before expiration. Incentive stock options can trigger the alternative minimum tax when exercised, while non-qualified options are taxed as ordinary income at exercise. There isn't a single right answer that applies to everyone.
How do I diversify out of a concentrated stock position?
Common approaches include selling in planned increments over time, using a 10b5-1 plan to schedule trades in advance, and coordinating the timing of sales with other income in a given year. The right approach depends on your position size, your company's trading windows, and your broader tax picture.
What is a 10b5-1 plan and do I need one?
A 10b5-1 plan is a pre-set trading schedule that allows insiders to buy or sell company stock on a predetermined basis, even during periods when they might otherwise be restricted from trading. It can be useful for diversifying a concentrated position in an orderly way, though not everyone needs or has access to one.
Do you work with clients outside of North Carolina?
Yes. While High Rock is based in Marvin, NC we work with clients nationally.
Ready to Look at Your Equity Compensation as a Whole?
If you're sitting on unexercised options, an upcoming vesting event, or a deferred comp decision you haven't fully thought through, a second look often surfaces something worth addressing before the next deadline. Schedule a call with High Rock to talk through your specific situation.