One of the costliest equity compensation mistakes is exercising at the wrong time.
These decisions get made every day by smart, successful people who are guessing, searching online, or taking advice from an advisor who knows the investment side but has never run an AMT projection, and a CPA who files an accurate return but has never seen the financial plan.
The gap between those two conversations is where equity compensation value disappears.
ISO exercise, then an AMT surprise
Exercised without modeling the alternative minimum tax.
An unplanned tax bill that could have been modeled in advanceRSU concentration
Most of the portfolio in one company's stock.
Retirement plans tied to one company's resultsESPP sold too soon
Shares sold before the qualifying disposition date.
Gains that may be taxed as ordinary income instead of long-term ratesThis isn't standard financial planning.
Each grant type has its own tax rules, its own timing, and its own interaction with the rest of your income. Exercising in December instead of January can change which tax year the income lands in, and California adds its own layer on top.
Five strategies, one coordinated team.
ISO exercise strategy
We model how many shares to exercise each year against your other income, your bracket, your AMT crossover point and the rest of your plan, so you capture the spread without the surprise.
NSO tax planning
Non-qualified options are taxed as ordinary income when you exercise. We run the scenarios against your full tax picture so you know what you'll net before you decide.
RSU diversification
We build a sell-down schedule that balances your risk tolerance, your tax situation and your overall allocation, so each vest is a planned sale, not a reaction.
ESPP optimization
We track your lots and model when to sell, so you don't turn long-term gains into ordinary income by selling before the qualifying disposition date.
AMT modeling and management
We project AMT alongside regular tax through the year, not just at filing, so every exercise decision is made with both tax systems in view.
Your equity comp doesn't exist separately from the rest of your financial life.
A decision about when to exercise isn't only a tax question. It's a planning question, an investment question and a tax question at the same time. At Up Capital, that's how we treat it.
That's possible when your planner, your portfolio manager and your tax strategy sit on one team. It's much harder when they don't.
One team. Every angle. Before you act.
Equity compensation planning for corporate executives.
Executives rarely hold one grant type. ISOs, NSOs and RSUs vest on overlapping schedules, trading windows close when the news breaks, and a large share of your net worth sits in one ticker. We plan across all of it together.
Concentrated position risk
When one stock is most of your net worth, the company's earnings report moves your retirement date. We build a multi-year diversification schedule that coordinates sell-downs with your tax picture and the rest of your plan, instead of reacting to each vest as it lands.
ISO and NSO coordination
Incentive and non-qualified options are taxed under different rules at different moments. We model each grant against your other income and your AMT crossover, so how many shares to exercise this year versus next is a decision, not a guess.
Equity compensation planning for startup employees.
Startup equity rewards you for staying, and the tax rules punish timing mistakes quietly. ISO exercises, QSBS holding periods and double-trigger vesting all have windows that close without warning. We help you plan them before the liquidity event, not after.
ISO exercise timing
Exercising incentive stock options can trigger AMT, and waiting too long risks a disqualifying disposition that turns favorable treatment into ordinary income. We model the spread, your AMT exposure and the holding-period clock so you exercise in a year that makes sense for your income.
QSBS planning
Qualified Small Business Stock may exclude a large share of your gain from federal capital gains tax if you hold the shares more than five years and the issuer qualifies. California does not follow the federal exclusion, so we model both. We help track the holding period, confirm eligibility and plan around the exclusion limit before a liquidity event closes the window.
Built for the complexity you're actually dealing with.
Corporate executives
Vesting schedules across several grant types, with ISOs, NSOs and RSUs stacking up at once, that need one coordinated strategy instead of piecemeal advice.
Startup employees and early hires
Deciding when to exercise, how many shares, and how to plan around a company that may or may not go public.
Part of your full financial picture.
At Up Capital, every discipline informs the others. One team works across your whole financial life, so an exercise decision is a tax decision, an investment decision and a plan decision at once.
Led by Anton Bayer, CFP®, and Nyle Bayer, AIF®, ARPC. Meet the team →
Tax planning
RSU vesting and option exercises are major tax events. We plan around them all year and coordinate with your CPA at filing.
Investment management
Concentrated positions and sell-down schedules managed with tax in mind, by the team that runs your portfolio.
Financial planning
Equity compensation is often the largest wealth-building event of a career. The plan is built around it.
Estate planning
Company shares titled correctly, beneficiaries current, and the step-up in basis considered before you sell.
Equity compensation questions.
Incentive stock options (ISOs) can qualify for long-term capital gains treatment if you meet the holding periods, but exercising them can trigger the alternative minimum tax. Non-qualified stock options (NSOs) are taxed as ordinary income when you exercise, on the difference between the strike price and the market value, with no AMT. Which is better for you depends on your income, your grant terms and your plan.
Restricted stock units are taxed as ordinary income when they vest, based on the share price that day. There's no exercise decision. Planning is about lining up vesting with your other income, deciding whether to sell or hold at vest, and managing how much of your net worth ends up in one company.
When you exercise ISOs, the spread between your exercise price and the market value counts toward the alternative minimum tax, even though regular tax doesn't apply until you sell. Whether you actually owe AMT depends on your total income, the size of the spread and your other deductions. Spreading exercises across tax years can help manage it. California has its own AMT as well.
It's when a large share of your net worth is in one company's stock, which is common with equity compensation. The risk is that your plan depends on one company's results. Ways to reduce it include scheduled selling, charitable giving and exchange funds, each with its own tax and timing trade-offs. None removes risk entirely.
Exercise timing, vesting and sales affect your tax bracket, your cash flow, your retirement contributions and how diversified you are. A coordinated plan looks at all of them together, alongside your investments, your retirement timeline and your estate plan, so each decision is made as part of the same picture.
This is general education, not individualized tax, investment or legal advice. Decisions about your equity compensation should be evaluated against your specific circumstances with qualified professionals.
Related reading on equity compensation
All Insights →A Guide to Equity Compensation Planning for ISOs, RSUs, and Concentrated Stock
How each grant type is taxed, where AMT comes in, and how to plan a concentrated position down over time.
InvestingHow to Diversify a Concentrated Stock Position
Scheduled selling, charitable giving and exchange funds, with the tax and timing trade-offs of each.