Life After Loss: Making Sense of My LTI Strategy
Angelo, the Senior Communications Executive of a technology company, lost his best friend when his wife Mary succumbed to cancer. Angelo recalled how time stood still when she was diagnosed. He notified his team and executive committee colleagues that he would pull back on business travel. He made accompaniment with Mary his first priority. Time was his greatest gift and their scarcest resource. And sadly, time ran out for Mary 18 months later.
Angelo had met Mary at the Ivy League university where they both excelled in finance. Mary had a keen financial mind and forged a career in Big Four accounting. It was Mary who had prepared their income taxes. She handled their household disbursements, investments through multiple brokerages and a trail of company retirement accounts. When her illness raged, they engaged a CPA to finish the taxes and to get her estate in order to pass everything smoothly to him at her death.
He feels her loss in large and small ways every day. Ironically, as a top 10 executive in the company, Angelo’s stock wealth had been accelerating during this period. The stock has been on a steady rise, with low volatility and a low dividend stream. He has an outsized concentration in his employer, a cloud-computing company. He has so many questions now that he has acquired the responsibility for financial order.
Before Mary got sick, they were considering engaging a comprehensive tax and investment planning advisor. The need for executive and wealth planning has become more acute now. The open window is approaching without Mary to help him with annual election decision points. He understands certain LTI decisions have multi-year tax implications. He must decide how to act on his nonqualified stock options.
The company-approved financial providers seem to offer one-size, fits-all plans, and proprietary investment solutions. They may fill the needs for most company employees, but he is not buying what they are selling. He would rather be represented by an independent firm that is sharp and advises a lot of executives like him. The visibility and optics of divesting are central issues to C-suite executives like Angelo, and he needs an advisor to guide him through the legal and corporate government implications of each transaction. Finally, he wants to delegate the whole thing – planning, tracking expirations and windows, coordinating the moving parts – to create order out of what he feels like is chaos, after Mary.
- Should he exercise and divest the NQOs or hold them until expiration?
- How can he gain control over his financial life?
- How might he “automate” or establish plan-generated triggers for divesting?
His near-term priority was creating order out of chaos. He has been working with SFG for less than one year. Already, he feels more confident with a clear tax plan and advice about his NQO elections. Next, his SFG Financial Advisor will coordinate with his estate attorney and CPA to update his estate plan.
As he headed off cycling a 30-miler last Sunday, he felt strong physically and spiritually. He is on the path to regaining progressively greater control over his financial life and has a close relationship with an advisor he trusts.
*The name, likeness, and circumstances in this example are a fictional composite of facts from executives similar to actual SFG Clients.