SFG’s New Resource Center: Designed to Address Questions from NQDC – to the 2010 Tax Relief Act

Posted on March 4, 2011 by admin

By Charles “Chuck” Steege, Personal Financial Planner

Whether you have questions about your stock options or just need clarification around the 2010 Tax Relief Act, the SFG Resource Center has a lot to offer.

Do You Know Your Slice of The 2010 Tax Relief Act?

For example, one Philadelphia-based vice president we know was in a year-end quandary.

Time was running out on her deferred compensation election and she still wasn’t sure what to do.

She had a chance to put up to 100% of her bonus in her firm’s non-qualified deferred compensation (NQDC) plan. “I’m making a decent salary,” she wondered. “Should I commit the whole amount?”

Her travel schedule was so hectic at year-end; I knew we wouldn’t have time for a meaningful dialogue until absolutely the last minute. Still, she wanted some information to read between appointments.

We suggested she download a copy of “Attention Decision Makers: It’s Time to Decide What to do about Your NQDC Choices.” That provided the background she needed, so we could counsel her on her selection and still make the year-end deadline.

Questions? Visit the SFG Resource Center

Download one or more of the following free publications and check back often as we continue to add more material.

  • Executive Checklist: The 2010 Tax Relief Act The new tax-relief bill extends the current tax rates through 2012. What does this mean to you? How well do you know the basics? Take this two-minute self-test and see.
  • Seven Facts Every Executive Should Know about Stock Options Unlocking the complex potential in your stock-based compensation can be made easier when you consider these seven facts about stock options.
  • Five Reasons to Like Performance Shares (and One Reason to Think Twice) What do long-term trends like of pay for performance mean to highly compensated executives and increasing numbers of mid-level managers? Find out with this informative publication.
  • Attention Decision Makers: It’s Time to Decide What to do about Your NQDC Choices Put the facts about NQDC to work for your personal plan with this helpful piece.

Mr. Steege is President of SFG Wealth Planning Services, Inc. (SFG), a fee-only financial planning firm. Founded 15 years ago, SFG is dedicated to assisting senior executives and their employees with their complex stock-based compensation and planning challenges.

Posted in Executive Compensation, Fiduciary, Non Qualified Deferred Comp, Performance Shares, Planning | Tagged , , , , , | Leave a comment

Questions about Tax Planning or NQDC? SFG’s New Resource Center is Designed for Executives on the Go

Posted on March 1, 2011 by admin

By Charles “Chuck” Steege, Personal Financial Planner

One Philadelphia-based vice president we know was in a year-end quandary.

Need Facts? Visit SFG Resource Center

Time was running out on her deferred compensation election and she still wasn’t sure what to do.

She had a chance to put up to 100% of her bonus in her firm’s non-qualified deferred compensation (NQDC) plan. “I’m making a decent salary,” she wondered. “Should I commit the whole amount?”

Knowing when to commit

Her travel schedule was so hectic at year-end; I knew we wouldn’t have time for a meaningful dialogue until absolutely the last minute. Still, she wanted some information to read between appointments.

We suggested she download a copy of “Attention Decision Makers: It’s Time to Decide What to do about Your NQDC Choices” from our new SFG Resource Center. That provided the background she needed, so we could counsel her on her selection and still make the year-end deadline.

Questions? Visit the SFG Resource Center

Whether you have questions about your stock options or just need clarification around the 2010 Tax Relief Act, the SFG Resource Center has a lot to offer. Download one or more of the following free publications and check back often as we continue to add more material.

  • Executive Checklist: The 2010 Tax Relief Act The new tax-relief bill extends the current tax rates through 2012. What does this mean to you? How well do you know the basics? Take this two-minute self-test and see.
  • Seven Facts Every Executive Should Know about Stock Options Unlocking the complex potential in your stock-based compensation can be made easier when you consider these seven facts about stock options.
  • Five Reasons to Like Performance Shares (and One Reason to Think Twice) What do long-term trends like of pay for performance mean to highly compensated executives and increasing numbers of mid-level managers? Find out with this informative publication.
  • Attention Decision Makers: It’s Time to Decide What to do about Your NQDC Choices Put the facts about NQDC to work for your personal plan with this helpful piece.

Mr. Steege is President of SFG Wealth Planning Services, Inc. (SFG), a fee-only financial planning firm. Founded 15 years ago, SFG is dedicated to assisting senior executives and their employees with their complex stock-based compensation and planning challenges.

Posted in Executive Compensation, Fiduciary, Non Qualified Deferred Comp, Performance Shares, Planning | Tagged , , , , | Leave a comment

The 2% Solution: What Are You Doing with Your Social Security Tax Break?

Posted on January 14, 2011 by csteege05

By Charles “Chuck” Steege, Executive Financial Coach

For senior executives and staff, one sweeping benefit of the new 2010 Tax Relief Act is the 2% cut in the Social Security tax rate of 6.2% to 4.2%.

Charles "Chuck" Steege, Executive Coach

The tax rate for Social Security, in effect, is reduced from a maximum of $6,621.60 to $4,485.60.

The Act extends the current tax rates through 2012.

For those who anticipate that increasing tax rates may be a problem next year, this year’s Social Security tax break offers a kind of 2% solution in the here and now.

What are you doing with your 2% solution?

You can spend it or save it – or direct the monies to your current asset allocation strategy. Why not consider giving your retirement planning or education planning strategy a boost?

The 2% Social Security Solution is just one of the strategies embedded in the 2010 Tax Relief Act that has an impact on senior executives and their staff.

There are other implications in the Act, too. It doesn’t look like there will be income phase-outs for the 2% reduction in Social Security tax, as there are in the Making Work Pay Credit. It’s worth having a chat with your financial advisor to see if this affects your 2010 tax filing.

If you are interested in learning more about the implications of this new law to your finances, I invite you to order a free copy of our latest Executive Compensation Forum publication: EXECUTIVE CHECKLIST: THE 2010 TAX RELIEF ACT.

Call my Associate Planner, Julian Johnson, at 215-345-5601 and she will be happy to email you a copy.

Julian Johnson, Associate Planner

Mr. Steege is President and Chief Executive Officer and Julian Johnson is Associate Planner of SFG Wealth Planning Services, Inc. (SFG), a fee-only financial planning firm. Founded 15 years ago, SFG is dedicated to assisting senior executives and their employees with their complex stock-based compensation and planning challenges.

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Are You an Optimist? Electing Year-End Stock-Based Compensation

Posted on November 3, 2010 by csteege05

By Charles “Chuck” Steege, Executive Financial Coach

Restricted Stock Units or Non-Qualified Options?

That is the question.

The Road to Stock-Based Success Begins Inside You

Human resource directors agree that such grants are one of the best incentives available to ensure the long-term success of their companies, as well as the well-being of workers and stockholder.

But what about you?

In some firms, executives may choose which stock plan they prefer; and, in a few cases, executives may choose both.

When presented with a choice, how does an executive know which direction to take?

RSUs: Simple solution for the conservative outlook

RSUs represent an unsecured promise by the employer to grant a set number of shares of stock to the employee upon the completion of the vesting schedule, generally three years and a day.

If your firm faces some near-term uncertainty, you may be more comfortable choosing RSUs — which parallel conventional stock performance in theory.

NQOs: Potential for significantly greater reward that RSUs — or nothing at all

With NQOs, you have the choice between exercising your option to purchase your shares, or if you are “out of the money” you can simply let your options expire.

If you are an optimist and believe your firm’s stock will appreciate, you can realize more upward appreciation with NQOs than RSUs. That’s because NQOs provide a leveraged way to capture more of the upside from positive stock performance. However, your NQOs could expire without value.

With RSUs, on the other hand, you can acquire blocks of shares on a regular basis.

Whether you are an optimist or pessimist, the rules governing stock-based compensation can be complex. Take the time to do your research carefully: www.investopedia.com offers solid, general information in this area. For more depth, consider consulting with your tax advisor or financial planner.

Mr. Steege is President and Chief Executive Officer of SFG Wealth Planning Services, Inc. (SFG), a fee-only financial planning firm. Founded 15 years ago, SFG is dedicated to assisting senior executives and their employees with their complex stock-based compensation and planning challenges.

Posted in Executive Compensation, Incentive, Non Qualified Deferred Comp | Tagged , , , | Leave a comment

Attention Decision Makers: It’s Time to Make a Decision — about Your Year-End NQDC Choices

Posted on October 18, 2010 by csteege05

By Charles “Chuck” Steege, Executive Financial Coach

It’s that time of year when the thoughts of compensation-savvy C Suite executives turn to their new elections for their Non-Qualified Deferred Compensation (NQDC) plans.

For many senior executives, however, pressed by other demands on their time, decisions about their NQDCs can be overly perfunctory – or non-existent at year-end. This can lead to missed opportunities for tax-deferral; or unrealistic personal spending projections in the New Year.

NQDC Strategies May Require Crystal Gazing

As urgent as NQDC decision making is at year-end, any decisions have to be of the crystal ball variety.

Here’s why: According to the strict IRS 409A Rule that governs NQDC, you must make decisions about your 2011 NQDC distribution at least 12 months before the scheduled distribution date.

That means, in effect, you have to make a best estimate or “guess” of how much of next year’s compensation you will actually need to spend, as well as save for emergencies.

For love or money

NQDCs are a way for corporations to show favored employees some “love” by providing additional compensation that can grow tax-deferred. If you are eligible for an NQDC plan, you can defer receiving this income until a time you elect upfront, such as to retirement or a specific number of years into the future for other financial goals.

What’s there not to like about all of this love?

Simply this, there are key decisions that fall on you at this time of year that must be made if you wish to avoid having your NQDC plan turn into a kind of Trojan horse full of adverse tax surprises.

It’s only after making a best effort at those decisions with the help of a spouse or financial advisor that you can decide what percentage of your compensation should be deferred.

For more ideas like this, your are invited to subscribe to SFG Executive Compensation Forum. Mr. Steege is President and Chief Executive Officer of SFG Wealth Planning Services, Inc. (SFG), a fee-only financial planning firm. Founded 15 years ago, SFG is dedicated to assisting senior executives and their employees with their complex stock-based compensation and planning challenges.

Posted in Corporate Responsibility, Executive Compensation, Non Qualified Deferred Comp, Performance Shares, Planning | Tagged , , , , | Leave a comment

Should You Reduce Your Capital Gains Exposure in 2010 While There Is Still Time?

Posted on October 14, 2010 by csteege05

By Charles “Chuck” Steege, Executive Financial Coach

Thanks to indecision in Washington, D.C., no one knows for sure which tax laws will sunset or expire at the end of this year.

That’s why 2010 is so critical to the year-end planning process for America’s senior management teams.

If you have significant unrealized gains in some of your investments, and you are contemplating selling them, now might be a good time.

Through the end of 2010, there is no long-term capital gains tax for those in the 10% and 15% tax brackets. For everyone else, capital gains top out at 15%.

Next year, though, the capital gains tax might increase substantially.

Any year-end discussion of stock strategies within the corporate framework deserves a look at performance shares, too.

Many of today’s discussions inside and outside corporate board rooms still focus on how to link long-term incentive awards with performance. This is particularly important since shareholders are interested in how companies are positioning themselves for recovery when the economy stabilizes.

Finally, through the day’s rush of events, keeping a close eye on the taxable events associated with stock-based compensation can seem like one financial task too many. When overlooked, though, tax-advantaged events – like the “year and a day rule”1 for Non-Qualified Options (NQO) – can be easily missed out on.

The result: an inadvertent tax expense from the stock-based compensation grant could be possible.

Fortunately, executives have an alternative to the process of monitoring stock-based compensation events themselves. This time-consuming chore, instead of a cause for executive procrastination, can be one more activity a senior executive assigns to an outside expert for completion.

Mr. Steege is President and Chief Executive Officer of SFG Wealth Planning Services, Inc. (SFG), a fee-only financial planning firm. Founded 15 years ago, SFG is dedicated to assisting senior executives and their employees with their complex stock-based compensation and planning challenges.

1An executive cannot eliminate ordinary income taxation on an NQO at the time of exercise. However, once an NQO is exercised and an executive continues to then hold the post-exercised shares, the capital gains period begins and then converts to long-term capital gains if the shares are then held for one year and one day.

Posted in Executive Compensation, Fiduciary, Incentive, Non Qualified Deferred Comp, Performance Shares, Planning | Tagged , , , , | Leave a comment

Money on the table: Why executives in transition should think twice before accepting their next job

Posted on July 21, 2010 by csteege05

Executive Financial Coach Chuck Steege and Executive Employment Agreement Specialist Tony Koester show job changers how to avoid becoming a case history gone wrong in a new webinar scheduled for noon, July 21, 2010. Join us by registering here.

From health care and manufacturing to finance and retail, pockets of senior executive hiring activity are being seen around the Northeast, according to Charles “Chuck” Steege, CFP®, executive financial coach.

Establishing parity is a priority

“For executives who had been lying low during the retrenchment and layoffs of 2009, 2010 may represent a chance to better their position if they have been feeling stuck,” Mr. Steege said recently.

Psychologically, the lure of the new for a senior executive is powerful, he noted. “A bigger salary, a higher position and new reporting relationship,” he continued, “may offer powerful draws to an executive who has been frustrated and restless.”

Faced with all of these incentives to move, Mr. Steege’s clients are being told that they should, well, take a deep breath and think. “Here’s why,” he added. “While the heart may be shouting ‘move now,’ it is important to make sure the head is also asking ‘how good a deal is this new job, really?’”

With colleague Tony Koester, employment agreement specialist, Mr. Steege is taking a message of caution to eager, job-changing senior executives in their first webinar together: “Congratulations on your new job (…And why you should think twice before leaving your old job)” on July 21.

“I have seen too many situations that went south,” Mr. Koester said. “Senior executives on the move put their careers in potential peril if they neglect asking questions like these: ‘Are my job responsibilities and reporting relationship reflected in my new contract? Does my new employer face regulatory, shareholder and compensation committee constraints that could affect my decision to accept?’”

Title: “Congratulations on your new job (…And why you should think twice before leaving your old job)”
Date: Wednesday, July 21, 2010
Time: 12:00 PM – 12:30 PM EDT

After registering you will receive a confirmation email containing information about joining the Webinar. See you there!
Posted in Executive Compensation, Performance Shares, Planning | Tagged , , , , , | Leave a comment

Considering a New Job Offer? Join Us for a Webinar July 21 Before You Sign on the Dotted Line

Posted on July 13, 2010 by csteege05

Put advice on your side before signing on

Executive financial coach, Chuck Steege, and executive employment agreement specialist, Tony Koester, have teamed up to present advice and encouragement to those senior executives who are contemplating new job offers. Chuck and Tony counsel aspiring job changers on how to avoid becoming a case history gone wrong by taking the right steps to ensure employment contract clarity before signing on the dotted line.

Space is limited, so please register here now

If you want to make sure you are comparing “apples” to “apples” between your old and new job, you will not want to miss “Congratulations on your new job (…And why you should think twice before leaving your old job).” This original webinar will take you step-by-step through the questions every executive must answer before saying “yes” to a new employer. You will never leave money “on the table” again, after you join us on July 21 at 12 PM EDT for this original half-hour webinar.

Title: “Congratulations on your new job (…And why you should think twice before leaving your old job)”
Date: Wednesday, July 21, 2010
Time: 12:00 PM – 12:30 PM EDT

After registering you will receive a confirmation email containing information about joining the Webinar. See you there!
Posted in Corporate Responsibility, Executive Compensation, Planning | Tagged , , , | Leave a comment