Equity play: timing and concentration
Advisors are stressing timing vesting/sales, avoiding concentration risk, and pairing equity moves with tax planning — basics resurfaced by Jared Crawford and other commentators this week. The crowd take: use vesting events to rebalance, limit single‑employer exposure, and document all grants for tax purposes. ( )
A growing set of advisers treat vested RSUs as cash-equivalent compensation and recommend selling at vest rather than holding long-term; analysis from Flat Fee Advisors and several wealth firms showed selling-and-reinvesting at vest produced stronger median outcomes across broad samples. (flatfeeadvisors.org (flatfeeadvisors.org)) Advisory frameworks now commonly include an immediate tax-first sale rule—sell enough shares at vest to cover the tax bill if withholding is incomplete—language repeated in Wealthspire’s and Mercer Advisors’ client guidance. (wealthspire.com (wealthspire.com)) Systematic rebalancing strategies tied to each vesting event—examples include automated partial sells or a fixed-percentage sell plan at every vest—are recommended to reduce timing risk and create a multi-year diversification glidepath. (vestingstrategy.com (vestingstrategy.com)) Financial regulators and large-advisor case studies flag single‑employer concentration as a quantifiable risk, with common heuristics calling for single‑stock exposure below roughly 10–20% of investable assets and explicit mitigation plans for positions above 30–40%. (finra.org (finra.org)) For Canadian tech employees, RSUs are generally taxed as employment income at vest and reported on the T4, while employee stock‑option benefits are taxed at exercise with potential one‑half deductions subject to rules and a post‑June 25, 2024 $250,000 threshold on the deduction for option benefits. (canada.ca (canada.ca)) (millerthomson.com (millerthomson.com)) Advisers reiterate documentation and reporting discipline—retain grant agreements, vesting schedules and broker trade confirmations because employers report taxable benefits on slips and underwithholding at vest can create year‑end liabilities if not planned for. (bakermckenzie.com (resourcehub.bakermckenzie.com)) (rivers-wealth.com (rivers-wealth.com))
