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STOCK OPTIONS · RSUs · CONCENTRATED EQUITY
Executives & Equity Compensation
Connect your equity decisions with the rest of your plan.
An equity decision is also a cash flow, tax, and financial planning decision. We help you organize the information and connect the tradeoffs.
CLARITY FOR WHAT COMES NEXT.YOUR EQUITY. YOUR NEXT CHAPTER.
You earned it.
Give it a plan.
Your stock compensation is part of a bigger financial picture. We connect the tax, timing, and risk decisions—before you exercise, before you sell, and before your next liquidity event.
Supporting employees at Meta, Google, Microsoft, Amazon—and many more.
A plan for the equity you’re building.
Practical support for stock options, RSUs, and concentrated company stock.
Pre-IPO & liquidity planning
Prepare for an IPO or liquidity event, with a plan for taxes, cash needs, and the decisions ahead.
Stock options & ISO / AMT planning
Compare exercise and sale scenarios, including potential Alternative Minimum Tax exposure from incentive stock options.
Concentration risk
Understand how company stock fits into your overall financial picture and evaluate diversification choices.
Tax strategies for appreciated positions
Explore tax-aware strategies for highly appreciated stock, coordinated with your broader financial goals.
WORKING WITH ARETE
A clear starting point.
A practical next step.
Bring award agreements, vesting schedules, recent returns, and the exercise, sale, or liquidity decisions ahead.
Tell us what you needDefine the right support.
We review your needs, discuss the engagement, and agree on scope and next steps.
Move forward with clarity.
Coordinate documents through your secure client portal and work with our team on the agreed plan.
A FEW COMMON QUESTIONS
Equity compensation.
Clearly explained.
What is equity compensation?
Equity compensation is a form of compensation tied to ownership or the value of a company. Common examples include restricted stock units (RSUs), incentive stock options (ISOs), nonqualified stock options (NSOs), and employee stock purchase plans (ESPPs).
What is the difference between RSUs, ISOs, and NSOs?
RSUs generally become taxable when shares vest and are delivered. ISOs may qualify for favorable tax treatment if specific requirements are met, but exercising them can create alternative minimum tax exposure. NSOs generally produce ordinary compensation income when exercised.
When do I owe taxes on restricted stock units (RSUs)?
RSUs are generally taxable as ordinary compensation when the shares vest and are delivered. Any subsequent appreciation or depreciation is generally treated as capital gain or loss when the shares are sold.
Do I owe taxes when I exercise incentive stock options (ISOs)?
Exercising ISOs generally does not create regular federal income tax immediately, but the difference between the exercise price and fair market value may trigger alternative minimum tax (AMT). The ultimate treatment depends on the holding period and other factors.
What is the alternative minimum tax (AMT), and how does it affect stock options?
The AMT is a parallel federal income tax calculation that can affect individuals exercising ISOs. An exercise may generate AMT liability even if the shares have not been sold.
What is the difference between a qualifying and disqualifying disposition of ISO shares?
A qualifying disposition generally requires holding ISO shares for more than two years after the grant date and more than one year after exercise. Selling before satisfying these requirements generally results in a disqualifying disposition, which can change the ordinary income and capital gains treatment.
Should I exercise my stock options before leaving my employer?
That depends on your option agreement, expiration dates, exercise cost, tax exposure, and financial circumstances. Many plans impose a limited post-termination exercise window, making advance planning important.
Can I owe taxes on stock options even if I haven’t sold the shares?
Yes. NSO exercises generally create taxable compensation income, and ISO exercises can create AMT exposure, even when the shares are retained.
How are employee stock purchase plans (ESPPs) taxed?
Tax treatment depends on whether the ESPP qualifies under Section 423 and whether the shares meet applicable holding period requirements. Sales can produce ordinary compensation income, capital gains, or both.
What is an 83(b) election?
An 83(b) election allows certain taxpayers receiving substantially nonvested property in connection with services to elect to recognize income at the time of transfer rather than when the property vests. The election generally must be filed within 30 days of the property transfer. Ordinary RSUs generally are not eligible.
How can I reduce taxes when selling company stock?
Potential strategies include coordinating sales with other income, evaluating capital gains holding periods, managing ISO exercises, tax-loss harvesting, and planning around charitable contributions. The appropriate strategy depends on the type of equity compensation and individual circumstances.
Can equity compensation affect my taxes if I work in multiple states?
Equity compensation may be sourced across multiple states based on where services were performed during the relevant period. State residency and allocation rules can create additional reporting obligations.
Can Arete help with equity compensation from a private company or startup?
Yes. We can assist with tax planning involving startup equity, stock options, restricted stock, liquidity events, and related tax considerations.
What happens to my stock options if my company goes public or is acquired?
An IPO or acquisition may affect liquidity, exercise opportunities, withholding obligations, and potential tax exposure. The consequences depend on the equity award agreement and transaction structure.
Can Arete prepare my tax return and develop an equity compensation tax strategy?
Yes. We provide tax preparation and planning services designed to coordinate equity compensation transactions with your broader tax situation.
LET’S TALK ABOUT WHAT’S NEXT
Bring the pieces together.
Tell us what you’re working toward. We’ll help you find a clear place to start.