Long-term incentive plans should serve
your life goals, not just the bottom line.
The intricacies of LTIP can be overwhelming. Whether you're evaluating a new package or reassessing your current plan, we can help you know what’s right for you.
Schedule a free consultation, or call 630.389.6430 for more information.
You’re earning good money, but are you building
wealth to live the life you want?
Know Your Options:
The Most Common Types of Long-Term Incentives.
Stock Options:
The Right to Buy at a Specified Price
INCENTIVE STOCK OPTIONS
Annual limit: Can only vest into $100,000 per year to maintain preferential tax status
Holding periods:
Keep for 2+ years after getting them (granted)
Keep for 1+ year after using (exercising) them
Both required for tax benefits
Tax benefits:
No regular tax when exercising
(only AMT impact)If held long enough, their entire profit is taxed as capital gains
If sold too early, they’re taxed like regular stock options
NON-QUALIFIED STOCK OPTIONS
No waiting periods required
Tax timing:
No tax when granted
Pay ordinary income tax when exercised on the profit (market price minus strike price)
Pay capital gains tax on any increase after exercising
Consider selling right after exercising to:
Avoid extra capital gains tax
Prevent too much investment in company stock
Restricted Stock Units & Performance Stock Units:
Company shares given as compensation, but you get them later
Tax timing:
No tax when granted
Pay ordinary income tax when shares become accessible (vest)
Vesting types:
Gradual: Get some shares periodically over time
Cliff: Get all shares at once after waiting period
After vesting:
Shares are fully yours
Can choose to keep or sell
Consider selling quickly to avoid extra tax and diversify
RSUs vs PSUs:
Work the same tax-wise
Main difference: PSUs depend on performance goals
RSUs may or may not have performance goal component
Deferred Compensation (DC) Plans:
Supplemental Retirement Savings Vehicles
Extra savings plan beyond qualified retirement plan limits
401(k), 403(b, and most 457 Plan) Contribution Limits: $23,000 in 2024, or $30,500 over the age of 50
Key features:
Can use alongside qualified retirement plans
No federal or state income tax on money going in
Pay federal and state tax when taking money out
Must decide contribution amount early
Can't change deferral amount during year
Must plan withdrawal timing after leaving job
Money at risk if company has financial trouble
We’ll plan how much to save based on your cash needs, current tax rates, and expected future tax rates
Capstone Builds Your Wealth Management
Plan Around Your Goals, Your Life
More than a financial advisor, we’re your partner. We get to know you.
Strategic Compensation Optimization
Receive ongoing guidance on compensation opportunities unique to corporate executives.
Tax-Smart Planning & Preparation
Minimize tax impact across all forms of executive compensation with no surprises come tax time.
Comprehensive Wealth Integration
Make the most of your executive benefits to achieve your personal wealth goals.
The Capstone Difference
Independent Fiduciary Financial Advisors
As fiduciary advisors, we’re both ethically and legally bound to put your interests first. Through fee-only compensation, we don’t work on commissions.
Full-Service Excellence
Your executive position demands attention to detail across investment management, tax planning, estate planning, and risk management.
Boutique Attention
Your personalized strategy reflects your unique compensation structure, company equity, and long-term objectives.
And we always consider tax implications. Always.
Schedule Your Free, No-Obligation Consultation
It’s private and confidential. We’ll listen to you. What are your goals? What drives you? We’ll tell you about our approach and give you the information you need to make an informed decision right for you and your family.
Schedule a free consultation, or call 630.389.6430 for more information.