Case Studies

Smart Advice Client Focus®

Tech Company’s IPO Crisis

A Boston-area technology company went public and issued Incentive Stock Options (ISOs) as a key part of its executive compensation program. Unknowingly, the company was in violation of IRC 422, which limits the amount of ISOs that can vest in any calendar year to $100,000. Any amount in excess of $100,000 is taxed as a non-qualified stock option when exercised and is subject to higher income and FICA tax.

Client Need

Professional assistance to correct regulatory issues quickly, with minimal impact.

Smart Advice

We examined the stock grant agreements and uncovered the problem as part of the regular review for one of the executives, who was a corporate executive planning client. We notified the company and the problem was rectified prior to any financial impact to the new shareholders.

  • The clients were spared substantial tax penalties
  • The company took corrective actions internally and adopted IRC 422 rules for new grants

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Tax Planning

See how our trusted advisors can create a tax-efficient portfolio designed to produce greater after-tax returns.

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