Contributed by: Jared Virgadamo, CRPC®, CFS®
At some point in a successful career, many executives begin to ask a simple but important question: Do I need to be doing something about my company stock?
It usually does not come up at the beginning. Early on, equity compensation feels like a benefit, not a concern. Over time, however, that balance shifts. Shares accumulate. The company performs well. What once felt like a small piece of the picture becomes one of the largest components of personal wealth. That is when the question becomes more pressing. Not because something is wrong, but because more is at stake.
Recent market events have made this even more apparent. Periods of strong growth followed by sharp adjustments have highlighted how quickly concentrated positions can change in value. For many executives, this has prompted a closer look at how much of their financial future is tied to a single company.
So how do you know when it is time to pay closer attention?
In many cases, it starts when company stock begins to represent a meaningful portion of your net worth. While every situation is different, many executives begin to reassess when that number reaches 10 to 20 percent or more. At that point, the conversation is no longer theoretical. It becomes a question of planning.
What Do I Do With My Company Stock?
Once the question is raised, the next challenge is knowing what to do. For many executives, the default approach is to hold. The company is familiar. The outlook may be strong. There is a natural desire to participate in continued growth. At the same time, recent experience has shown how quickly conditions can change. In the technology sector, a period of sustained growth was followed by a meaningful shift as interest rates rose beginning in 2022. Companies that had performed well for years saw their valuations adjust. This was not limited to weaker businesses. Many well managed companies experienced similar pressure. Executives who had built significant positions over time were faced with a difficult reality. What had been a source of strength also introduced a level of risk that had not been fully addressed.
This is where a more structured approach becomes valuable.
Rather than trying to find the perfect moment to act, many executives benefit from creating a plan. In practice, this often means setting guidelines in advance. For example, determining how much stock to sell over time, or establishing thresholds where action will be taken. This helps remove emotion from the decision making process. It can also involve spreading sales across multiple years. This approach allows for gradual diversification while managing the impact of taxes.
For some, charitable giving becomes part of the strategy. Donating appreciated shares instead of cash can support philanthropic goals while also improving tax efficiency.
The specific approach will vary, but the common theme is intentionality. Decisions are made within a framework, rather than in reaction to short-term market movements.
Why Should I Do Anything With My Company Stock?
This is often the most important question, and the one that is easiest to delay. If the company is performing well, it can be tempting to leave things as they are. After all, the position was built through success. However, the purpose of planning is not to respond only when something goes wrong. It is to prepare in advance for a range of outcomes. The events of recent years have provided a clear example of why this matters.
During the regional banking stress in 2023, several institutions faced rapid and unexpected challenges. Stock prices declined, and in some cases, uncertainty extended beyond financial performance to leadership teams and employee roles. For executives in those situations, the impact was not limited to their investment portfolios. Income and professional stability were also affected. This is the nature of concentration risk. It is not just about market performance. It is about how multiple areas of your financial life can be tied to the same source. Even outside of periods of stress, concentration can influence flexibility. A portfolio heavily weighted toward one company may limit your ability to make other investment decisions, manage cash flow, or plan for long term goals.
Taking action does not mean a lack of confidence in your company. It reflects an understanding that your financial future should not depend too heavily on any single outcome. For many, the goal is not simply reducing risk. It is gaining confidence that their plan can hold up across different scenarios.
Bringing It All Together
Company stock is often one of the most meaningful assets an executive owns. It represents not only financial value, but also years of effort and professional achievement. That is why decisions around it deserve careful attention. A thoughtful approach begins with understanding how much of your wealth is tied to your company, and how that fits within your broader financial picture. From there, it becomes a matter of creating a plan that balances opportunity, risk, and tax considerations. It also means looking ahead. Future equity compensation can continue to increase exposure, even if no action is taken today. Planning proactively allows for more consistency and fewer reactive decisions over time.
These are not one time decisions. They evolve as your career, your company, and your financial goals change.
Turning Questions Into A Plan
For many executives, the challenge is not recognizing these issues. It is knowing how to move from questions to a clear course of action. This is where a coordinated approach can make a meaningful difference.
At Granite Harbor Advisors, we work with corporate executives across Texas and beyond to help bring structure and clarity to decisions around company stock. Our team works together across investment management, tax planning, and long-term strategy to ensure that each decision fits within a broader, well-considered plan.
If you have found yourself asking whether you should be doing something with your company stock, that is often the right time to begin the conversation.
A focused discussion can help clarify where you stand, what options are available, and how those choices align with your long-term goals.