Maximizing Outcomes

Navigating Employee Stock Options, RSU’s and Stock Purchase Plans (Ep. 58)

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Stock benefits can be a powerful tool for building wealth, but they often come with confusion and hidden risks.

How do stock options, RSUs, and employee purchase plans work? What tax implications should you consider? How can you protect yourself from overconcentration in company stock?

In this episode, Jim McGovern breaks down different types of stock benefits, explaining how they function, their tax implications, and the risks involved. He provides insights on when to exercise options, how to diversify, and strategies for hedging against potential losses.

Jim discusses:

  • The differences between stock options, restricted stock units (RSUs), and employee stock purchase plans, including how they are granted, vested, and taxed
  • The risks of holding too much company stock, including historical data on stock declines and why diversification is key
  • Tax implications of incentive stock options (ISOs) and non-qualified stock options (NSOs), including how timing affects tax rates
  • How restricted stock units (RSUs) provide a more straightforward benefit compared to stock options and why many large companies prefer them
  • Hedging strategies to protect against stock declines while still maintaining potential for future gains
  • And more

    • Resources:

    • Hedging Risk in a Concentrated Stock Portfolio with Eric Metz, CFA of SpiderRock Advisors (Ep. 31)

      • Connect with McGovern Wealth Group:

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        • ...more
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        Maximizing OutcomesBy Jim McGovern
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