You deserve an advisor who connects all the dots.
How One High-Earning
Executive Channeled Complex Compensation to Grow Wealth
Copyright © 2021 Brighton Jones. All rights reserved.
The testimonial or endorsement provided is not representative of all third-party opinions. For additional perspectives on services provided by Brighton Jones, please seek out other publicly available reviews and information.
Securing your place within company leadership—as a director, vice president or chief officer—takes years of hard work and sacrifice. Along with increased income at this career stage come new obstacles.
A 2016 study found that most executives report feeling high levels of stress, caused by work, along with family and health concerns.¹ With a demanding job, family, your health, and your personal interests and passions, it’s understandable if financial planning falls by the wayside.
To make the stress worth it, it’s crucial to keep the long-term picture in mind. How can you be sure that your corporate compensation package is strategically positioned to grow your wealth now and in the future? Are you missing opportunities because you need advice or don’t have the time to manage your wealth on your own?
One T-Mobile executive had those very questions and needed help to make sure he was on the right track.
Make Sure Your Money Works as Hard as You Do
How One High-Earning
Executive Channeled Complex Compensation to Grow Wealth
Are you making the most of your compensation? See how one executive leveraged their corporate compensation package to achieve their goals and gain peace of mind.
Research suggests that the potential annualized value-add, on average, of working with an advisor is around 3 percent. This number will vary for each individual client, and the value-add will ebb and flow year-by-year based on circumstances, but over time, this value is persistent and meaningful.²
Planning Today Pays Dividends Tomorrow
A Compensation Package That Raised
More Questions Than It Answered
Given his access to material nonpublic information, the executive was restricted from trading company stock for several years.
Once the restrictions lifted, the executive needed advice on how to unwind the significant concentration of company stock in his investment portfolio. This process required a thoughtful and deliberate approach to several complicating factors, including trading windows, blackout dates, capital gains impact, vesting grants, and the optics of a top executive selling a substantial number of shares.
With an executive compensation package and very little time to manage and maximize the value of benefits ranging from employee stock purchase plans to stock options, deferred compensation, performance-contingent pay, and significant bonuses, this client realized they needed to think beyond merely reducing their stock concentration. They wanted expertise that would help them leverage their complex compensation to grow their wealth.
Few company executives have the free time needed to successfully manage a portfolio of this size and variety on their own. Aligning his benefits with his and his family’s long-term financial goals was a task too daunting to tackle alone.
Intimate Knowledge of Compensation Packages at
America's Largest Companies
Brighton Jones advisors are proud to help countless clients navigate the trickiest components of their benefits offerings, whether that’s minimizing tax liabilities, allocating end-of-year bonuses, or analyzing competing job offers.
Here are just a few of the companies whose compensation packages we help clients with every day:
Integrating Complex Compensation
Into a Comprehensive Plan
In Brighton Jones, the executive found a partnership that offered objective, fee-only advice from a team of fiduciary advisors.
First up, the executive’s team at Brighton Jones addressed the stock concentration by devising a plan that spread sales out over 12 months, factoring in future restricted stock vests. Unloading the stock too quickly without considering a broader strategy could have lost the client a considerable amount of earning potential. From a public reporting perspective, it was important for the Brighton Jones team to work closely with the client to ensure these sales complied with blackout dates and trading windows.
Starting
Allocation
After Target
Diversification
Brighton Jones also managed the executive’s portfolio with optimal tax efficiency in mind. As a high-income, high-net-worth individual, failing to plan ahead for taxes could mean more missed earning opportunities and an unnecessarily high tax bracket.
After constructing a sales calendar, the team quantified capital losses from the previous and current tax years to offset gains from the sales. For greater tax efficiency, shares were also organized by specific lots and tax characteristics. Low-cost basis share sales were paired with capital losses, then switched over to high-basis shares. To further offset the tax impact of selling shares, the Brighton Jones team included a charitable gift to the client’s donor-advised fund as part of the overall trading plan.
Diversification:
How Much of Your Company Stock is Too Much?
Most company executives want to be invested in their company’s success—but how much is too much? Even though they know their stock choices don’t reflect their confidence in their company, making that distinction emotionally can be difficult.
While market risk is the risk associated with investing in capital markets, idiosyncratic risk is tied to a specific asset—like company stock. Variation in stock price due to missed earnings, downward guidance, or C-level executive turnover are examples of idiosyncratic risks.
Brighton Jones also managed the executive’s portfolio with optimal tax efficiency in mind. As a high-income, high-net-worth individual, failing to plan ahead for taxes could mean more missed earning opportunities and an unnecessarily high tax bracket.
After constructing a sales calendar, the team quantified capital losses from the previous and current tax years to offset gains from the sales. For greater tax efficiency, shares were also organized by specific lots and tax characteristics. Low-cost basis share sales were paired with capital losses, then switched over to high-basis shares. To further offset the tax impact of selling shares, the Brighton Jones team included a charitable gift to the client’s donor-advised fund as part of the overall trading plan.
Three Benefits of Diversification that Single Company Stock Can't Match
Reducing
Volatility
Protecting
Assets
Generating a Smoother Return Stream
We’ll evaluate all aspects of your corporate compensation package and provide dispassionate advice. For example, if it is an opportune time to sell some company stock, we can make that call without any emotional attachment.
A Transformed and Efficient Financial Strategy
In the end, the executive’s investment portfolio saw a two-thirds reduction to his concentration in company stock. This was accomplished with a tax cost of less than 8 percent (meaning that only 8 percent of the total proceeds went to taxes; the other 92 percent were net proceeds that could be reinvested). The client was also able to fulfill some longtime charitable goals by leveraging low-basis shares and their donor-advised fund.
The Brighton Jones team executed this plan over time and in the most tax-efficient way possible, using unbiased expertise to optimize the client’s executive compensation package and create more balance within his family’s investment portfolio.
Retain More Net Proceeds via Tax Efficiency
Maximize Corporate Compensation
and Free Up Time for What Matters Most
Moreover, by partnering with an integrated team that oversees corporate benefits, investments, tax planning, philanthropy, estate planning, retirement, risk management, real estate, and more, the client was able to free up time for what matters most in life—family, community, and his own passions.
Schedule an introductory call with our team to take the first step toward maximizing your corporate compensation package and growing your wealth.
Let's revisit the T-Mobile executive's initial predicament: they recognized the untapped potential of their corporate compensation package, but couldn't be sure it was set up to grow their wealth over time. How could they unwind their concentration of company stock and diversify their portfolio, all while minimizing taxes?
Their team at Brighton Jones did just that, building and executing a financial plan that accounted for company-specific trading windows, blackout dates, and vesting grants. The client now has a compensation package that serves their long-term financial goals, rather than one that's disconnected from a broader strategy.
A Little Bit About Brighton Jones
Brighton Jones is one of the country's fastest-growing wealth management firms, with more than $26 billion in assets under advisement.
We are proud to help more than 4,000 clients live a richer life every day.
During 2020 alone, our team garnered the following recognition:
Top 100 Independent Financial Advisors
Top Ranked RIA
Top Registered
Financial Advisors
Citations
¹ Ganesh, Ravindra, et al. “The Stressed Executive: Sources and Predictors of Stress Among Participants in an Executive Health Program.” Global Advances in Health and Medicine, vol. 7, 2018, https://journals.sagepub.com/doi/10.1177/2164956118806150
² Kinniry, Jr., CFA, et al. "Putting a value on your value: Quantifying Vanguard Advisor's Alpha®" Vanguard, February 2019, https://advisors.vanguard.com/iwe/pdf/ISGQVAA.pdf
The information, analysis, and/or recommendations included here is based solely on the knowledge of Brighton Jones financial advisors, and does not represent the views or advice of T-Mobile. T-Mobile did not contribute, review, or approve this content.
How One High-Earning
Executive Channeled Complex Compensation to Grow Wealth
Are you making the most of your compensation? See how one executive leveraged their corporate compensation package to achieve their goals and gain peace of mind.
Securing your place within company leadership—as a director, vice president or chief officer—takes years of hard work and sacrifice. Along with increased income at this career stage come new obstacles.
A 2016 study found that most executives report feeling high levels of stress, caused by work, along with family and health concerns.¹ With a demanding job, family, your health, and your personal interests and passions, it’s understandable if financial planning falls by the wayside.
To make the stress worth it, it’s crucial to keep the long-term picture in mind. How can you be sure that your corporate compensation package is strategically positioned to grow your wealth now and in the future? Are you missing opportunities because you need advice or don’t have the time to manage your wealth on your own?
One T-Mobile executive had those very questions and needed help to make sure he was on the right track.
Make Sure Your Money Works as Hard as You Do
Research suggests that the potential annualized value-add, on average, of working with an advisor is around 3 percent. This number will vary for each individual client, and the value-add will ebb and flow year-by-year based on circumstances, but over time, this value is persistent and meaningful.²
Planning Today Pays Dividends Tomorrow
A Compensation
Package That Raised
More Questions Than
It Answered
Given his access to material nonpublic information, the executive was restricted from trading company stock for several years.
Once the restrictions lifted, the executive needed advice on how to unwind the significant concentration of company stock in his investment portfolio. This process required a thoughtful and deliberate approach to several complicating factors, including trading windows, blackout dates, capital gains impact, vesting grants, and the optics of a top executive selling a substantial number of shares.
With an executive compensation package and very little time to manage and maximize the value of benefits ranging from employee stock purchase plans to stock options, deferred compensation, performance-contingent pay, and significant bonuses, this client realized they needed to think beyond merely reducing their stock concentration. They wanted expertise that would help them leverage their complex compensation to grow their wealth.
Few company executives have the free time needed to successfully manage a portfolio of this size and variety on their own. Aligning his benefits with his and his family’s long-term financial goals was a task too daunting to tackle alone.
Intimate Knowledge of Compensation Packages at
America's Largest Companies
Brighton Jones advisors are proud to help countless clients navigate the trickiest components of their benefits offerings, whether that’s minimizing tax liabilities, allocating end-of-year bonuses, or analyzing competing job offers.
Here are just a few of the companies whose compensation packages we help clients with every day:
Integrating Complex Compensation Into a Comprehensive Plan
In Brighton Jones, the executive found a partnership that offered objective, fee-only advice from a team of fiduciary advisors.
First up, the executive’s team at Brighton Jones addressed the stock concentration by devising a plan that spread sales out over 12 months, factoring in future restricted stock vests. Unloading the stock too quickly without considering a broader strategy could have lost the client a considerable amount of earning potential. From a public reporting perspective, it was important for the Brighton Jones team to work closely with the client to ensure these sales complied with blackout dates and trading windows.
Starting Allocation
After Target Diversification
Brighton Jones also managed the executive’s portfolio with optimal tax efficiency in mind. As a high-income, high-net-worth individual, failing to plan ahead for taxes could mean more missed earning opportunities and an unnecessarily high tax bracket.
After constructing a sales calendar, the team quantified capital losses from the previous and current tax years to offset gains from the sales. For greater tax efficiency, shares were also organized by specific lots and tax characteristics. Low-cost basis share sales were paired with capital losses, then switched over to high-basis shares. To further offset the tax impact of selling shares, the Brighton Jones team included a charitable gift to the client’s donor-advised fund as part of the overall trading plan.
Diversification:
How Much of Your Company Stock is Too Much?
Most company executives want to be invested in their company’s success—but how much is too much? Even though they know their stock choices don’t reflect their confidence in their company, making that distinction emotionally can be difficult.
While market risk is the risk associated with investing in capital markets, idiosyncratic risk is tied to a specific asset—like company stock. Variation in stock price due to missed earnings, downward guidance, or C-level executive turnover are examples of idiosyncratic risks.
Brighton Jones also managed the executive’s portfolio with optimal tax efficiency in mind. As a high-income, high-net-worth individual, failing to plan ahead for taxes could mean more missed earning opportunities and an unnecessarily high tax bracket.
After constructing a sales calendar, the team quantified capital losses from the previous and current tax years to offset gains from the sales. For greater tax efficiency, shares were also organized by specific lots and tax characteristics. Low-cost basis share sales were paired with capital losses, then switched over to high-basis shares. To further offset the tax impact of selling shares, the Brighton Jones team included a charitable gift to the client’s donor-advised fund as part of the overall trading plan.
Three Benefits of Diversification that Single Company Stock Can't Match
Reducing Volatility
Protecting Assets
Generating a Smoother
Return Stream
We’ll evaluate all aspects of your corporate compensation package and provide dispassionate advice. For example, if it is an opportune time to sell some company stock, we can make that call without any emotional attachment.
A Transformed and Efficient Financial Strategy
In the end, the executive’s investment portfolio saw a two-thirds reduction to his concentration in company stock. This was accomplished with a tax cost of less than 8 percent (meaning that only 8 percent of the total proceeds went to taxes; the other 92 percent were net proceeds that could be reinvested). The client was also able to fulfill some longtime charitable goals by leveraging low-basis shares and their donor-advised fund.
The Brighton Jones team executed this plan over time and in the most tax-efficient way possible, using unbiased expertise to optimize the client’s executive compensation package and create more balance within his family’s investment portfolio.
Retain More Net Proceeds via Tax Efficiency
Maximize Corporate Compensation and Free Up Time for What Matters Most
Moreover, by partnering with an integrated team that oversees corporate benefits, investments, tax planning, philanthropy, estate planning, retirement, risk management, real estate, and more, the client was able to free up time for what matters most in life—family, community, and his own passions.
Schedule an introductory call with our team to take the first step toward maximizing your corporate compensation package and growing your wealth.
Let's revisit the T-Mobile executive's initial predicament: they recognized the untapped potential of their corporate compensation package, but couldn't be sure it was set up to grow their wealth over time. How could they unwind their concentration of company stock and diversify their portfolio, all while minimizing taxes?
Their team at Brighton Jones did just that, building and executing a financial plan that accounted for company-specific trading windows, blackout dates, and vesting grants. The client now has a compensation package that serves their long-term financial goals, rather than one that's disconnected from a broader strategy.
A Little Bit About Brighton Jones
Brighton Jones is one of the country's fastest-growing wealth management firms, with over $8.5 billion in assets under management.
We are proud to help more than 3,000 clients live a richer life every day.
During 2020 alone, our team garnered the following recognition:
Top 100 Independent Financial Advisors
Top Ranked RIA
Top Registered Financial Advisors
Copyright © 2021 Brighton Jones. All rights reserved.
Citations
¹ Ganesh, Ravindra, et al. “The Stressed Executive: Sources and Predictors of Stress Among Participants in an Executive Health Program.” Global Advances in Health and Medicine, vol. 7, 2018, https://journals.sagepub.com/doi/10.1177/2164956118806150
² Kinniry, Jr., CFA, et al. "Putting a value on your value: Quantifying Vanguard Advisor's Alpha®" Vanguard, February 2019, https://advisors.vanguard.com/iwe/pdf/ISGQVAA.pdf
The information, analysis, and/or recommendations included here is based solely on the knowledge of Brighton Jones financial advisors, and does not represent the views or advice of T-Mobile. T-Mobile did not contribute, review, or approve this content.
Are you making the most of your compensation? See how one executive leveraged their corporate compensation package to achieve their goals and gain peace of mind.
Are you making the most of your compensation? See how one executive leveraged their corporate compensation package to achieve their goals and gain peace of mind.