Whether planned or unplanned, retirement prior to age 65 may present an income gap until the qualifying age to receive pensions and Social Security. While stock administrators cannot offer financial planning advice, they need to know how taxation variables impact executives as they draw down company stock from a variety of accounts and compensation plans. The complexity surrounding stock-based compensation clouds the dilemma: Which funds should be drawn from to optimize the performance and minimize the tax consequences?
Different types of equity awards carry different pros and cons. When designing an equity plan for your company, it is essential to consider what equity vehicles are right for your corporate structure and level of resources. In this post, we explores a few of the more popular equity types including stock options, restricted awards, and performance-based awards.