Sonya & James

The Situation

Sonya and James have been living in the San Francisco Bay Area for several years. They have been married for 8 years and recently welcomed their daughter, Mia, into the family. To this point, the two of them have been able to get out of debt and contribute to their 401(k) plans up to the company match.

Sonya works for a big tech company & has recently received a promotion, which comes with an increase in salary, bonus %, and a refresher RSU grant.

James began working for a startup company 3 years ago and in that time has been awarded ISO grants. The company has experienced rapid growth, which has also been reflected in a higher 409A valuation. Now James is beginning to hear talk of the company going public via a direct listing.

After doing some online research about RSUs, ISOs & the Alternative Minimum Tax, they decided that the stakes were too high to navigate their new financial situation alone.

The Approach

While they have never worked with a financial planner before, they knew they needed someone outside of the traditional big-firm financial advisor. They wanted to find someone who:

• was able to explain and illustrate various equity compensation strategies in a way that was easy to understand

• could walk with them through the upcoming liquidity event

• would not try to “sell” them on any particular solution

The Results

We created a plan for James’ liquidity event that Sonya and James felt was a good balance of risk vs. reward (not to mention reduced a lot of the emotional stress on the day the company goes public!).

They were able to bring home enough money to fund short-term savings goals such as a new car, get a head start on Mia’s college savings, and be able to splurge on a nice trip to Hawaii to celebrate their upcoming 10th anniversary. And of course, we had a good understanding of the upcoming tax liability and made sure that covering AMT wasn’t an issue.

In the following years, they were able to optimize their income and remaining equity compensation to provide Sonya the freedom to take a one-year sabbatical to dedicate time with Mia before she starts kindergarten, followed by Sonya pursuing a new career as a program coordinator for a non-profit organization.