Executive equity planning
Executive stock sales: use the plan to reduce real concentration.
Executives often adopt 10b5-1 plans because they need a compliant way to sell. The deeper reason is usually concentration: too much net worth, income, career risk, and future compensation tied to one company.
What to model before choosing the sale schedule
- Current exposure: employer stock as a percent of liquid net worth, total net worth, and annual compensation.
- Future grants: expected RSU, PSU, option, or bonus-linked equity over the next 12 to 24 months.
- Tax lots: short-term gains, long-term gains, high-basis shares, low-basis shares, and any shares tied to ISO holding periods.
- Rule 144 and Section 16: affiliates may have volume, filing, and reporting workflows separate from the plan terms.
- Cash use: estimated taxes, home purchase, charitable giving, diversification, debt payoff, or estate transfers.
Common executive sale patterns
Base diversification plan
Sell a fixed amount every month or quarter until employer stock falls below a target percentage of net worth.
Vest-and-sell overlay
Sell a percentage of future RSU or PSU vests so new grants do not rebuild the concentrated position.
Tax-year cap
Limit sales in a year to manage federal brackets, NIIT, state taxes, estimated tax payments, or charitable-deduction strategy.
Retirement or departure runway
Adopt early enough that sales can occur before a retirement, resignation, lockup expiration, or role transition creates new constraints.
The advisor's job
The advisor should not replace counsel or broker administration. The advisor should bring the financial model: target exposure, lot strategy, sale cadence, reinvestment policy, cash reserves, and tax-year coordination. That model then informs the 10b5-1 instructions that counsel and broker review.
For mechanics, read the rules overview, the cooling-off guide, and example plan structures.
Need executive stock-sale planning?
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