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Solutions for Corporate Executives

Executives at publicly traded companies face many unique challenges when managing their personal financial plans. The individuals are often so consumed by the demands of their occupations that they are unable to dedicate the necessary focus to their personal financial situations.

Our team specializes in providing consulting services to successful corporate executives on a variety of issues that are unique to their situations.

  • Concentrated Stock Positions,
  • Equity Based Compensation,
  • Regulatory Requirements / Forms Filing,
  • Company Trading Policies and,
  • Additional Corporate Solutions.

Click here to view an educational brochure on corporate executive solutions.



Concentrated Stock Positions

Executives may own large concentrations in their employer's stock. This concentration can come in the form of shares of stock, options, restricted stock, SARs and shares in qualified plans. Executives also need to consider their reliance on the company for non-stock-related factors including cash compensation, healthcare benefits and retirement packages. If something were to happen to an executive's employer that severely impacted its ability to perform over the longrun, it could have a devastating effect on the executive's personal financial situation.

There are a variety of solutions available to address a concentration in a single stock. Every client's situation is unique, so our team works to first identify the client's objectives. After understanding the company's trading policy, we offer recommendations of any possible strategies that can accomplish the client's goals.

Techniques that may be of interest to executives with a concentration include:

  • 10b5-1 Sales Plans,
  • OTC Collars,
  • Variable Prepaid Forwards,
  • Equity Exchange Funds,
  • Net Unrealized Appreciation and
  • Charitable Techniques.

Click here to view an educational brochure on concentrated equity.



Equity-Based Compensation

In addition to cash compensation executives are often compensated through stock ownership. This can come in several forms, including stock options, restricted stock, and stock appreciation rights (SARs).

Stock Options

Stock options offer executives the ability to purchase company shares at a predetermined strike price no later than a defined expiration date. They typically have vesting periods that prohibit exercise prior to a specific date. Stock options come in two forms: non-qualified and incentive.

Non-qualified stock options are taxable as compensation to an executive upon exercise. Incentive stock options can offer favorable tax treatment if certain conditions are met. However, they also create alternative minimum tax implications for some individuals.

There are many factors that go into stock option planning. Our team focuses on a comprehensive approach that analyzes the relative valuation of each option grant, the tax ramifications of an exercise and the client's overall exposure to the company. Additionally, catalysts such as an approaching expiration or unexpected liquidity need can also warrant exercise. If a decision is reached to exercise, our team can also assist in evaluating methods to pay for the exercise (i.e., cash payment vs. cashless alternatives).

Restricted Stock / SARs

Companies can compensate employees by granting restricted stock. These shares have vesting schedules which prohibit the sale of the stock until the vesting date. Upon vesting, the shares are taxed as compensation at the prevailing market price. The executive must pay for the tax withholding, including federal, state and any applicable local taxes, either through cash or a sale of some of the restricted shares (cashless exercise).

Companies can also issue stock appreciation rights, which act like restricted stock, but are often settled in cash instead of shares. These provide the employee with the same economic benefit as restricted stock, without the company actually issuing shares. This can also be referred to as a phantom stock plan.

Our team is available to help plan for future restricted stock vesting dates and to analyze the possibility of making an 83(b) election within the first 30 days of receiving a new grant. This technique can be useful for executives expecting significant price appreciation in their company's stock. Electing 83(b) requires the employee to pay taxes upon grant of the restricted stock and converts any appreciation between the grant date and vesting date into a capital gain.



Regulatory Requirements / Forms Filing

Senior executives considered "control persons" at publicly traded companies must navigate the various regulatory requirements impacting transactions in company stock.

Rule 144

This rule, part of the Securities Act of 1933, pertains to unregistered shares of stock or shares owned by control persons. The regulation establishes parameters governing the sale of company shares by these individuals, including volume limitations on the number of shares that can be sold in a three-month period and the requirement to file Form 144 with the SEC.

Section 16

Section 16 of the Securities Exchange Act of 1934 also applies to affiliates of publicly traded companies. This regulation requires certain filing forms (most commonly Form 4), measures for short-swing profits and prohibits the short selling of company shares by insiders.

Our team works with executives to ensure adequate and timely filing of all necessary regulatory forms.



Company Trading Policies

Each public company has a policy governing employees' activities related to company stock. These policies may include required minimum ownership levels as well as define open trading windows and blackout periods for executives.

Our team assists executives in understanding and addressing company policies as part of the broader consultation work we provide. Using a 10b5-1 plan can be an effective way to affect a plan that targets an executive's goals while adhering to corporate policy.



Additional Corporate Solutions

Raymond James is a full-service financial institution and, as such, offers the following corporate solutions:

  • Qualified and Non-Qualified Benefit Plan Review,
  • Stock Option Accounting and Administration,
  • Share Repurchases,
  • Marketing to Institutional Investors,
  • Balance Sheet Cash Management,
  • Investment Banking Services,
  • Corporate Lending, and
  • Consultation on Other Issues (Revising Corporate Trading Policies, Alternative Capital Raising Structures, Corporate Derivatives, etc.).


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Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Towne Investment Group, Towne Wealth Management, and TowneBank are not registered broker/dealers, and are independent of Raymond James Financial Services.

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