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Business leaders

Business Leaders

Company executives, officers, and managers all have one thing in common – a unique compensation structure. This may include stock option awards, unique retirement plan benefits, or significant deferred compensation opportunities to name a few. We help clients think through the tax implications pre and post IPO, if a hedging strategy should be implemented and how to diversify their investments.

Case Study:

Isabella and Isaac both work for large, fast-growing technology companies. While both companies were private, Isabella’s was slated to go public shortly after she reached out to CAM. As a highly compensated executive, she was facing many critical planning decisions given her large and somewhat complicated equity compensation she received from her company. Almost 80% of her potential net worth is dependent on how much she can net from her ISOs and NQSOs grants over the next 3 – 5 years. Isaac also holds private company stock and earns a gracious salary which needs to be factored into their planning and tax projections. They have started to think about their income and distribution needs once they feel they can make work optional. Between various retirement accounts, equity compensation, and personal savings – they aren’t quite sure where to “put” their earnings nor how to invest it.


  • Gross income approximately $400,000
  • Roughly $700,000 in retirement assets, but very little liquidity
  • About $2.8 million in vested company stock option holdings
  • RSU Awards will begin soon


  • Secure wealth and make work optional in their 50’s
  • Minimize tax implications around capital gains and AMT
  • Hedge concentrated company stock risk if possible

Advanced Planning Needs

  • Manage concentrated stock risk
  • Tax planning
  • Balance sheet diversification
  • Tax-aware investment strategy

The Solution:

CAM was able to immediately help in assessing their stock and option compensation. In particular, since Isabella’s company was set to go public shortly after working with CAM, a lot of the initial priority was to establish a proper exercise strategy for her ISOs and NQSOs prior to the IPO. As is common with others who receive a lot of stock options, not having enough liquidity to fund exercise strategies was and still can be a big challenge for Isaac and Isabella. Therefore, we have strategy sessions during each quarterly exercise window to identify the best potential outcome which often involves multi-year planning needs. In addition, we also implemented a hedging strategy for some of Isabella’s ISO exercised stock shares to protect downside risk and provide more control until she could realize capital gains at a favorable long-term tax rate. As Isabella begins to exercise a large portion of her NQSOs to secure wealth, we have reinvested some proceeds into a tax-managed equity strategy that can help to offset capital gains due to future stock sales, thereby potentially reducing future tax liability.

These are fictional client pictures and profiles that provide case studies that represent unique individual situations and outcomes that have been presented to CAM.  Examples are for illustrative purposes only and may not necessarily be replicated.