EXECUTIVE & CONCENTRATED WEALTH
At what point does conviction become concentration risk?
Executive compensation and concentrated equity can create extraordinary wealth—and an increasingly complex relationship between taxes, liquidity, career risk and diversification.
THE SITUATION
Success can make one asset disproportionately important.
Restricted stock, options, founder shares and long-held company positions can become a dominant share of personal net worth.
WHAT WE EXAMINE
Look at the entire financial picture.
Concentration
How dependent is the household balance sheet on one company or asset?
Tax Basis
What tax consequences may follow from creating liquidity?
Compensation
How do future grants, vesting and employment risk affect the decision?
Liquidity
How much flexibility exists outside the concentrated position?
Diversification
What role should risk reduction play without forcing an arbitrary exit?
Legacy
How does the position interact with family, estate and long-term objectives?
THE PRINCIPLE
The right decision may not be “sell” or “hold.” It may be how to create optionality.
PRIVATE CONSULTATION
Start with the entire position.
We begin with the concentration, tax exposure and personal objectives before discussing possible paths.
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