Stock Rights That Protect the Value of Your Executive Equity Compensation

Twelve days ago, on Thursday September 1, 2022, 2022, CEOWorld magazine published an article I wrote on “Stock Rights That Protect the Value of Your Executive Equity Compensation.”

This new article is designed for CEOs, C-level and senior executives, who have recently received a job offer or expect to receive a job offer and will be negotiating terms of executive compensation which will include executive equity. 

In those negotiations, executive equity is often a very significant and often a major part of the executive compensation and a often a driver to accept a job offer.  This is so because executive equity offers the prospect of greater financial upside value than from your fairly fixed and limited cash compensation.  This special upside potential for executive equity arises from three different factors: (a)  Appreciation – with your service the stock price or value might rise significantly, (b) Liquidity Event – a potential acquisition or an IPO  might also significantly increase value, (c) Favorable Taxation – with appropriate structuring, appreciated equity on cash out may be taxed at a much lower rate than cash compensation for much greater take home pay. 

Thus, given the high importance of equity in the CEO’s or C-level executive’s compensation package the focus of my article then moves to discuss these five (5) critical areas of stock rights and terms you want to be sure to give proper attention in your negotiations to give you the best chance to achieve the potential value from the equity you are granted: 

  • Meaningful Level of Equity – to be sure that sufficient equity is granted so that if success is achieved, it will be impactful for you,
  • Tax Favorable Structure – negotiation over the form of your equity at the outset is quite important because in tax law – “form is substance” – different forms produce very different tax results and you want tax-favored equity if possible,
  • Severance Protection – if midway through the buildup you are forced out, you want your severance buy-out to embrace your equity as well as less important cash components of your comp package,
  • True Up Adjustment – especially if you are brought in to secure a financing raise, you don’t want to be a victim of your own success and seeking a level anti-dilution protection is a fair ask,
  • Cash-out protections – if after a number of years, no liquidity event is on the horizon, it is helpful to have a put option with the company to assure at some point you can tap into the value you achieved.

To see my full CEOWORLD magazine. article, go to LINK: https://ceoworld.biz/2022/09/01/stock-rights-that-protect-the-value-of-your-executive-equity-compensation/

Or on my website at https://www.executiveemploymentattorney.com/stock-rights-that-protect-the-value-of-your-executive-equity-compensation/

This was my 38th article published in CEOWORLD since 2016.  Previously, the editor advised that I can use “Featured in the CEOWORLD magazine” and the CEOWORLD “Logo” on my website and add CEOWORLD magazine in my LinkedIn profile’s “Experience Section” as an “Opinion Columnist.” and authority in the field.  

On its own initiative, CEOWORLD magazine created on their website a library of Robert Adelson published articles.   You can peruse this library and/or read as many of my 38 published articles as you wish.  See https://ceoworld.biz/author/robert-adelson/

CEOworld Magazine logo

With more than 12.4+ million-page views, CEOWORLD magazine is the world’s leading business magazine written strictly for CEOs, CFOs, CIOs, senior management executives, business leaders, and high net worth individuals worldwide. https://www.linkedin.com/company/ceomagazine/

Tweeting My New CEOWorld Article on “Stock Rights That Protect the Value of Your Executive Equity Compensation”

If you tweet and would like to tweet my article, here is my five (5) tweets to retweet or to use in your own tweet –

9/1/22 article @ceoworld by @attorneyadelson for #CEOs #CLevel #seniorexecutives on “#StockRights to #ProtectValue of Your #Executive #EquityCompensation “ including #acceleratingequity if u r #forcedout midway thru #companybuildup https://ceoworld.biz/2022/09/01/stock-rights-that-protect-the-value-of-your-executive-equity-compensation/ via @CEOWORLD magazine

9/1/22 article @ceoworld by @attorneyadelson for #CEOs #CLevel #seniorexecutives on “#StockRights to #ProtectValue of Your #Executive #EquityCompensation“ including #TrueUpAdjustment to keep ur #equitypercent if u lead #capitalraise  https://ceoworld.biz/2022/09/01/stock-rights-that-protect-the-value-of-your-executive-equity-compensation/ via @CEOWORLD magazine

9/1/22 article @ceoworld by @attorneyadelson for #CEOs #CLevel #seniorexecutives on “#StockRights to #ProtectValue of ur #Executive #EquityCompensation“ including #putoption to #cashout #executiveequity if no later #liquidityevent https://ceoworld.biz/2022/09/01/stock-rights-that-protect-the-value-of-your-executive-equity-compensation/ via @CEOWORLD magazine

It is my hope that this article will be of benefit to CEOs, C-level and senior executives to assure you give proper attention to the five key stock rights mentioned as you plan or negotiate your equity package often the most variable and potentially most important component of your executive compensation. Feel free to tweet or share this article. If you or any colleague of yours has a need in this area, please do reach out to me @ 617-875-8665 or rob@attorneyadelson.com .

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Negotiating Favorable Executive Equity Terms in an LLC – Capital vs. Profit Interests

Two weeks ago, on Sunday April 20, 2022, CEOWorld magazine published an article I wrote on “Negotiating Favorable Executive Equity Terms in an LLC – Capital vs. Profit Interests”

This new article is designed for CEOs, C-level and senior executives, who receive a job offer from a limited liability company where LLC equity will comprise an important component of your executive compensation package.  Most senior executives are familiar with executive stock and stock options, including ISOs and non-qualified option grants offered by corporation employers.  But how do you evaluate equity that is not stock or stock options?   What issues should you be concerned about when your executive equity package is comprised of LLC “member units”, called profits interests or capital interests?  

Continue reading “Negotiating Favorable Executive Equity Terms in an LLC – Capital vs. Profit Interests”

Merits of RSUs vs Stock Options and Other Forms of Executive Equity Compensation

Eight days ago, on Monday March 30, 2022, the executive career advancement website IvyExec published an article I wrote on “Merits of RSUs vs Stock Options and Other Forms of Executive Equity Compensation.”

This new article is designed not only for C-level and senior executives, but even for many directors and mid-level executives. 

My article discusses a less well known form of executive equity RSUs – restricted stock units, including these subjects: 

  • How are RSUs different from the more common forms of executive equity, stock options and restricted stock?
  • In what situations are RSUs an attractive executive equity choice? 
  • In what situations are other choices preferable for the executive?

To see my full IvyExec  article, go to LINK:

https://www.ivyexec.com/career-advice/2022/merits-of-rsus-vs-stock-options-and-other-forms-of-executive-equity-compensation/

 Or my website at

https://www.executiveemploymentattorney.com/merits-of-rsus-vs-stock-options-and-other-forms-of-executive-equity-compensation/

IvyExec hosts articles and webinars from experts in the career, leadership, and business spaces who wish to share their knowledge with our audience.  In April 2021, I was invited to write for IvyExec since it seeks original content on the topics of career development, leadership, and business strategy as it applies to senior-level and C-Suite professionals.  IvyExec blog posts and webinars are shared with its community of more than 2 million members on its website, in its newsletter, and on its social media channels.  https://www.ivyexec.com/career-advice/write-for-us/

IvyExec claims a “Community of 2.5M+ Leaders”.

Tweeting my new IvyExec article on “Merits of RSUs vs Stock Options and Other Forms of Executive Equity Compensation”

If you tweet and would like to tweet my article, here are my four (4)  tweets to retweet or to use in your own tweet –

It is my hope that this article will be of benefit to  C-level, senior and even lower level executives who are now or may in the future be negotiating over equity as part of their executive compensation and are not confident the stock price will rise and might even decline, and would like an alternative form of equity that can retain some value in cases where “underwater” stock options become worthless.