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Tag: Equity Comp

What is Equity Compensation?

Posted on by Hillary Mitchell

Equity compensation is a powerful tool that companies use to attract, retain, and incentivize employees. By offering ownership stakes in the company, businesses align employee interests with company performance, fostering loyalty and productivity. Various forms of equity compensation plans exist, each with unique features and benefits. Below are some of the most common types.

Understanding the Most Common Types of Equity Compensation Plans

1. Stock Options (ISOs and NSOs) 

Stock options provide employees the right to purchase company stock at a predetermined price, known as the grant or strike price, after a vesting period. There are two main types of stock options: 

  • Incentive Stock Options (ISOs): Available only to employees, ISOs offer favorable tax treatment, with capital gains taxes applied if shares are held for a certain period. However, ISOs can trigger the Alternative Minimum Tax (AMT) if the spread between the grant price and the fair market value at exercise is significant. Employees should carefully assess their AMT exposure when exercising ISOs, as they may need to pay AMT in the year of exercise, even if they have not yet sold the shares.
  • Non-Qualified Stock Options (NSOs): Available to employees, directors, and consultants, NSOs do not receive the same tax advantages as ISOs, as they are taxed as ordinary income upon exercise. The difference between the fair market value of the stock at exercise and the grant price is considered compensation income and is subject to payroll taxes, including Social Security and Medicare. Any subsequent gains or losses after exercise are treated as capital gains or losses upon sale of the shares.

2. Restricted Stock Units (RSUs) 

RSUs are company shares granted to employees that vest over time, typically based on continued employment or performance milestones. Once vested, the shares are owned outright, and the employee owes taxes based on the stock’s fair market value at the time of vesting. RSUs offer simplicity and value without requiring an upfront purchase, making them a popular choice. 

3. Restricted Stock Awards (RSAs) 

RSAs are similar to RSUs but differ in that employees receive stock upfront with restrictions that lift over time or upon achieving specific goals. Employees may elect to pay taxes at the time of grant (Section 83(b) election) rather than at vesting, potentially benefiting from lower tax rates if the stock appreciates. 

4. Employee Stock Purchase Plans (ESPPs) 

ESPPs allow employees to purchase company stock at a discount, often ranging from 5% to 15% off the market price. Employees contribute through payroll deductions, and stock is purchased at set intervals. Qualified ESPPs may offer additional tax advantages if holding requirements are met. 

5. Performance Shares and Stock Appreciation Rights (SARs) 

  • Performance Shares: These are granted based on achieving specific company goals, such as revenue growth or stock price targets. They provide strong incentives for employees to drive company success.
  • Stock Appreciation Rights (SARs): These provide cash or stock based on the appreciation of the company’s stock over time, without requiring an upfront investment from employees. SARs function similarly to stock options but do not require purchasing shares.

Equity compensation plans offer significant benefits to both employers and employees by fostering alignment between individual contributions and company success. Understanding the nuances of each plan helps employees maximize their compensation while allowing companies to structure their incentives effectively. Whether through stock options, RSUs, ESPPs, or performance-based awards, equity compensation remains a crucial element of modern compensation strategies. 

At Truepoint and Commas, we have a depth of experience helping clients navigate equity compensation packages from a wide variety of companies including P&G, GE, Amazon, Google, Microsoft, and more. Whatever your situation, we can help. Let’s talk.

Optimizing Microsoft Restricted Stock Units (RSUs)

Posted on by Hillary Mitchell

One of the most compelling aspects of Microsoft’s compensation packages is the awarding of Restricted Stock Units (RSUs). This amazing benefit comes with unique financial planning opportunities. Here at Commas, we are here to help you understand and navigate your RSUs. 

Understanding the RSU Basics 

RSUs are a type of equity compensation that gives employees the promise of Microsoft shares (MSFT) at a future date. You can be awarded RSUs at key moments—for example, when you are hired or annually as part of your performance review. These RSUs vest over time, and once they vest, they are yours, like any other stock you purchase. When they are awarded to you, the company indicates what the RSUs are worth at that time, noting that the value may differ upon vesting. This makes them a variable addition to your compensation package, subject to stock volatility. 

Employees have the option to use Fidelity or Morgan Stanley as their custodian. Vested shares typically appear in your brokerage account on the day or day after vesting. 

 Key RSU Terms 

Here are the key terms to understand: 

  • Grant Agreement: the document that outlines the conditions of your RSUs – number of shares granted, vesting period, etc.   
  • Grant Date: the date Microsoft awards RSUs to an employee 
  • Vesting Schedule: timeline over which RSUs become fully owned by the employee 
  • Vesting Date: the date in which the MSFT shares are distributed into your account 
  • Fair Market Value: value of the stock at any point in time 

For an overview of RSUs and what you need to know, check out our video on RSUs. 

Analyzing the RSU Vesting Schedule 

Microsoft has two types of vesting schedules, which are determined by why you were granted RSUs.  

  • On-hire awards – Vest annually over a four-year period. The first vest will fall on your first-year anniversary. 
  • Annual awards – Vest quarterly over a five-year period. You will typically receive these awards in August or March.  

If you leave prior to RSU shares vesting, you will lose those unvested shares.  

Tax Implications and Your Microsoft RSUs 

There is no tax impact when you are granted new RSUs. The tax implications come when they vest, as well as when you sell the shares.  

Once RSUs vest, they are taxed as ordinary income. Microsoft will automatically withhold 22% of your vesting amount to cover your tax bill—like tax withholding from your paycheck. When you surpass $1M in supplemental income in a calendar year, withholding is readjusted to a 37% withholding rate. Withholding is covered by selling a portion of your shares. Many employees, especially those subject to the 22% withholding rate, often find that the automatically withheld amount is not enough to cover their full tax bill, so it is helpful to monitor your tax obligations.  

If you hold onto your RSUs beyond the vesting date, your RSUs will be subject to capital gains taxation. The fair market value of the stock when they vest is the cost basis for these shares, and the sale price will determine your capital gain or loss, like with a typical stock sale. If you hold the shares for less than 1 year, those gains or losses will be treated as ordinary income. If you hold them for over 1 year, they will be taxed at capital gains rates.  

The information shown below offers current capital gain tax rates for 2025.  

RSUs can provide excellent opportunities to build wealth for Microsoft employees. As illustrated in this guide, there are many factors to consider, especially when it comes to tax implications. Our team is well-versed in helping Microsoft employees find the best path forward to meet goals that fulfill short and long-term financial needs. 

How to Maximize the Microsoft 401(k) Plan

Posted on by Hillary Mitchell

Navigating Microsoft’s 401(k) plan can be daunting, especially with the diverse options and features available. Below, we lay out the components of the plan and a few clear, useful tips any Microsoft employee can use to improve their current plan.

What Sets the Microsoft 401(k) Apart

There are three key aspects of Microsoft’s plan that make it stand out from others in the industry: 

  1. Employer match program. Microsoft will match 50% of your 401(k) contributions up to the pre-tax/Roth contribution limit. As of 2025, an employee can contribute up to $23,500 in pre-tax/Roth dollars. That means Microsoft can add up to $11,750 in matching contributions to your account if you contribute the maximum. Microsoft’s match will always be a pre-tax contribution.

    Even more notably, Microsoft’s matching contributions vest immediately. In other words, you own 100% of the company’s contribution right away. This is true even if you leave the firm the day after the funds are deposited into your account.

    Note: Microsoft does not match catch-up contributions for individuals over the age of 50.
  1. Wide selection of investment funds. As a Microsoft employee, you can choose from a diverse set of funds, including over 25 investment options —from target-date to individual index to actively managed funds. This broad selection enables employees to choose the right mix of investment vehicles to meet their unique set of priorities and goals.

    Bonus: You even have access to a Brokerage Link which expands your options beyond the 25+ investments listed!
  1. Emphasis on flexibility. Microsoft’s plan lets participants create their own tax strategy. They can contribute from pre-tax (Traditional), Roth, after-tax, bonus pre-tax, bonus Roth, and bonus after-tax dollars.

Start Now to Get the Most Out of Your Microsoft 401(k) Plan

As you consider how to tailor Microsoft’s plan to meet your specific goals, here are three key actions you can implement. 

  1. Max out your pre-tax/Roth contribution limit of $23,500. Given the impressive employer match, focus on maximizing Microsoft’s contribution to your 401(k) plan. The more you contribute, the more Microsoft will contribute, and they will do so until you hit the $23,500 limit. That’s an extra $11,750 of Microsoft’s money, and it vests to your retirement account immediately.

    Getting the full match is like getting a 10% raise on a $120,000 salary! If you can contribute $23,500 from your salary to your 401(k), consider adjusting your deferrals today. Otherwise, you are leaving free money on the table.
  1. Take advantage of catch-up contributions. If you are 50 or older by the end of the year, you can contribute an extra $7,500 to your 401(k) in 2025. Those 60 to 63 can contribute an additional $11,250 in place of the $7,500. You can choose to make this contribution pre-tax or as a Roth contribution.

    Although these additional funds, commonly referred to as “catch-up contributions,” will not qualify for the employer match, they will help you save significantly more towards retirement.
  1. Consider after-tax contributions, especially for the mega backdoor Roth strategy. We want to be sensitive around balancing shorter-term goals with the goal of retirement, but if your budget allows, you can contribute even more to your plan than the $23,500 limit mentioned earlier. This limit applies to pre-tax and Roth contributions only.

    You can also make after-tax contributions to your 401(k). As of 2025, your 401(k) account can receive as much as $70,000 in contributions each year. This includes all the money deposited into the account—both from you and your employer.

For example, an employee contributes the maximum amount of pre-tax/Roth dollars ($23,500). Microsoft matches 50% of that, which equals $11,750. In total, those contributions add up to $35,250—far short of the $70,000 limit. Therefore, this employee could still contribute another $34,750 in after-tax contributions to their 401(k) account.  

Microsoft also allows for in-plan Roth conversions, which completes the mega backdoor Roth strategy. You can learn more about the mega backdoor Roth strategy here.  

Analysis Paralysis 

A highly flexible retirement plan like Microsoft’s can provide enormous benefits but can also feel overwhelming. Probably the most common way people learn valuable “hacks” about their employer’s plan is through their coworkers. But those coworkers aren’t privy to the whole picture.  

Consider the range of personal and professional questions you might be facing:  

  • How do you balance saving for shorter-term goals (wedding, kids, house, etc.) with making sure you are on track for retirement?
  • How should your 401(k) be invested?
  • Should you be making pre-tax or Roth contributions?
  • Does maxing out after-tax contributions make more sense through your paychecks or using your annual bonus? How does this impact cash flow?
  • Should you prioritize debt or your 401(k)?
  • What should you do with your old 401(k) plans?

Your answers to these questions should directly inform your planning decisions. And they should make you cautious about simply opting for the plan’s default options—or taking the same approach as your colleagues.  

Our team’s in-depth knowledge of Microsoft’s retirement plan combined with our financial expertise and extensive array of quantitative tools can help simplify, streamline, and maximize your specific retirement plan. We are here to help you navigate the complex, inter-related set of decisions that constitute retirement planning.

Understanding Your Microsoft Compensation Package

Posted on by Hillary Mitchell

Building a career at Microsoft is an opportunity to work at the forefront of technology alongside some of the brightest minds in the industry. Microsoft compensation packages are also quite robust with excellent salaries and a benefits package with incredible potential.

Microsoft Compensation

Your total compensation is the sum of your:

  • Base salary
  • Bonuses
  • RSU grants

Microsoft Benefits

Beyond your salary, bonus and RSU grants, Microsoft also offers some incredible benefits in their compensation package. Your benefits include:

  • 401k match
  • HSA match
  • Employee Stock Purchase Program
  • Deferred Compensation Plan
  • Life insurance
  • Long-term disability
  • And more

HSA Match = $1,000 – $4,375

Microsoft’s HSA match varies and depends on which level you fall into and how many dependents you have on your health plan.

  Microsoft Contribution
  Level 40-49 and 59+ Level 30-39 and 50-58 
Employee Only $1,000 $1,750 
Employee + 1 $2,000 $3,500 
Employee + 2 or more $2,500 $4,375 

You must be in a high deductible health plan (HDHP) to be able to participate in a Health Savings Plan (HSA). Due to the amazing tax advantages of the HSA account, we love to recommend this to clients, but that doesn’t mean it is right for everyone. If you’re considering a HDHP, it’s important to consider all the factors including your providers, your health needs, if you’ll have a baby that year, etc.

  • Tip: The employer contribution that Microsoft offers counts towards the annual contribution limit of $4,300 for an individual and $8,550 for a family (plus a $1,000 catch up if over 55).

Life Insurance = 3x salary

At Commas, we’ll weigh if you need additional coverage—whether that is through voluntary coverage at Microsoft or via the open market.

  • Tip: Be sure to add beneficiaries to your Microsoft life insurance policy so that it passes to the appropriate people if something happens to you.

Long-term Disability = 60% salary up to a maximum of $15,000 per month

This is a benefit that you pay for—but that means the benefit is tax-free to you if you need to claim disability. You can also consider purchasing additional disability insurance from an outside provider to cover a higher percentage of your lost income.

Employee Stock Purchase Program (ESPP) = 10% discount on Microsoft’s stock price

Every year you can contribute a maximum of 15% of your cash compensation, up to a limit of $25,000, which means an immediate benefit of $2,500/year!

Be aware of qualifying and disqualifying dispositions. While qualifying dispositions come with favorable tax treatments, it also comes with the risks of holding Microsoft stock for a prolonged period of time.

  • Qualifying disposition means the stock must be held 1 year from the purchase date, and 2 years from the initial offering date to gain favorable tax treatment.

Deferred Compensation Plan (DCP) = Defer some of your taxable income today to a year in the future

This benefit is only available to employees who are Level 67 and higher and there are only two times during the year to enroll:

  • May (defer next year’s bonus).
  • November (defer next year’s salary).

When considering taking advantage of this benefit, you should weigh tax rates today vs. future tax rates and the risks of Microsoft’s longevity. With DCP, you are deferring compensation to a later year, in anticipation of Microsoft still being in business.

Maximizing Your Awards 

Think of the mix of salary, RSUs, and benefits that comprise your compensation as distinctive sources of wealth. Each has unique properties—advantages, as well as limitations—that enable you to achieve particular goals.

You can find more details about your specific benefits in HRweb – Benefits (aka.ms/benefits). When you are hired—and each year during open enrollment—you will make your benefit selections via aka.ms/benefitsenroll.

Our team has an in-depth understanding of Microsoft’s multi-level incentive structure, and we can help you navigate and optimize your specific compensation package, as well as make your benefit selections and review them annually.

Optimizing Your Google Stock Units (GSUs)

Posted on by Kelsie Joos

One of the most compelling aspects of Google’s compensation packages is the awarding of Restricted Stock Units (RSUs)—or Google Stock Units (GSUs) as employees like to call them. This amazing benefit comes with unique financial planning opportunities, including an asymmetrical vesting schedule, new tax obligations, limited selling windows, and possible enrollment in the Employee Trading Plan (ETP). Here at Commas, we are here to help you understand and navigate your GSUs. 

Understanding the GSU Basics 

GSUs are a type of equity compensation that gives employees the promise of Alphabet shares (GOOG) at a future date. You can be awarded GSUs at key moments—for example, when you’re hired or with your annual salary increase. These GSUs vest over time, and once they vest, they are yours, like any other stock you purchase. When they are awarded to you, the company indicates what the GSUs are worth at that time, noting that the value may differ upon vesting. This makes them a variable addition to your compensation package, subject to stock volatility. 

Historically, Google employees have received two kinds of shares: GOOGL (comes with voting rights, no longer distributed) or GOOG (no voting rights, still distributed). Employees’ vested shares are held in custody at Morgan Stanley. To view or sell your vested shares, sign into the Morgan Stanley portal.  

Key RSU Terms  

Here are the key terms to understand:

  • Grant Agreement: the document that outlines the conditions of your RSUs – number of shares granted, vesting period, etc.
  • Grant Date: the date Google awards RSUs to an employee
  • Vesting Schedule: timeline over which RSUs become fully owned by the employee
  • Vesting Date: the date in which the GOOG shares are distributed into your account
  • Fair Market Value: value of the stock at any point in time

For an overview of RSUs and what you need to know, check out our video on RSUs. 

Analyzing the GSU Vesting Schedule

GSUs vest over a four-year period, with 25% vesting after the first year and the remaining 75% vesting in equal monthly installments over the following three years. However, the vesting schedule may differ, particularly for new hires or promotional grants. If you stay at the company for four years, you will receive all your GSUs. If you leave prior to that, you will lose those unvested shares.  

Tax Implications and Your GSUs 

There is no tax impact when you are granted new GSUs. The tax implications come when they vest, as well as when you sell the shares.  

Once GSUs vest, they are taxed as ordinary income. Morgan Stanley will automatically withhold 22% of your vesting amount to cover your tax bill—like tax withholding from your paycheck. When you surpass $1M in supplemental income in a calendar year, withholding is readjusted to a 37% withholding rate. Withholding is covered by selling a portion of your shares. Many employees, especially those subject to the 22% withholding rate, often find that the automatically withheld amount is not enough to cover their full tax bill, so it is helpful to monitor your tax obligations.  

If you hold onto your GSUs beyond the vesting date, your GSUs will be subject to capital gains taxation. The fair market value of the stock when they vest is the cost basis for these shares, and the sale price will determine your capital gain or loss, like with a typical stock sale. If you hold the shares for less than 1 year, those gains or losses will be treated as ordinary income. If you hold them for over 1 year, they will be taxed at capital gains rates.  

The information shown below offers current tax rates for 2025.

Google’s Trading Windows and the Employee Trading Plan (ETP)

It’s important to note that you cannot sell GSUs at any time. Instead, there are trading windows that will open for you, depending on your level and type of shares. This is designed to help prevent insider trading, similar to how a 10b5-1 plan works.

To get around this, Google offers an optional Employee Trading Plan (ETP) that allows employees to sell a predetermined amount of GSUs throughout the year, regardless of trading windows.

The main benefit of the ETP is that GSUs will automatically sell on their vesting date, taking the burden of deciding when to sell out of your hands. Additionally, the other benefits of enrolling in the ETP include: 

  • Creates more predictable cash flow
  • Provides a more systematic approach to diversification through the enforced selling
  • Offers discipline and rational decision making rather than market timing

Some potential drawbacks of the ETP:

  • Lack of flexibility and control with selling GSUs – if you are enrolled in the ETP, you cannot sell any GOOG or GOOGL shares outside the plan or modify the automated trading schedule

Ultimately, enrolling in the ETP is something you need to consider in the context of your larger financial plan and your ability to abide by the plan’s parameters. If you do not enroll in the ETP, you can sell your Google stock during open trading windows (unless you have material, nonpublic information about Alphabet). 

GSUs can provide excellent opportunities to build wealth for Google employees. As illustrated in this guide, there are many factors to consider, especially when it comes to tax implications and trading windows. Our team is well-versed in helping Google employees find the best path forward to meet goals that fulfill short and long-term financial needs.   

How to Maximize the Google 401(k) Plan

Posted on by Kelsie Joos

Navigating Google’s 401(k) plan can be daunting, especially with the diverse options and features available. In this blog post, we will explain the components of the Google 401(k) plan. Our guide offers clear, useful tips for any Google employee looking to improve their current plans. 

Three key aspects of Google’s plan that make it stand out from others in the industry.

  1. Employer match program. Google will match 50% of your 401(k) contributions up to the pre-tax/Roth contribution limit. As of 2025, an employee can contribute up to $23,500 in pre-tax/Roth dollars. That means Google can add up to $11,750 in matching contributions to your account, if you contribute the maximum.

Even more notably, Google’s matching contributions vest immediately. In other words, you own 100% of the company’s contribution right away. This is true even if you leave the firm the day after the funds are deposited into your account. 

  1. Wide selection of investment funds. As a Google employee, you can choose from a diverse set of funds, including over 30 investment options —from target-date to individual index to actively managed funds. This broad selection enables employees to choose the right mix of investment vehicles to meet their unique set of priorities and goals.  
  1. Emphasis on flexibility. Google’s plan lets participants create their own tax strategy. They can contribute from pre-tax (Traditional), Roth, after-tax, bonus pre-tax, bonus Roth, and bonus after-tax dollars. 

Three steps you can take today to maximize the Google 401(k) plan

As you consider how to tailor Google’s plan to meet your specific goals, here are three key actions you can implement. 

  1. Maximize your pre-tax/Roth contribution limit of $23,500. Given the impressive employer match, focus on maximizing Google’s contribution to your 401(k) plan. The more you contribute, the more Google will contribute, and they will do so until you hit the $23,500 limit. That’s an extra $11,750 of Google’s money, and it vests to your retirement account immediately.

If you can contribute $23,500 from your salary to your 401(k), consider adjusting your deferrals today. Otherwise, you are leaving free money on the table.

  1. Take advantage of catch-up contributions. If you are 50 or older by the end of the year, you can contribute an extra $7,500 to your 401(k) in 2025. You can choose to make this contribution pre-tax or as a Roth contribution. Although these additional funds, commonly referred to as “catch-up contributions,” will not qualify for the employer match, they will help you save significantly more towards retirement.
  1. Consider after-tax contributions, especially for the mega backdoor Roth strategy. We want to be sensitive around balancing shorter-term goals with the goal of retirement, but if your budget allows, you can contribute even more to your plan than the $23,500 limit mentioned earlier. This limit applies to pre-tax and Roth contributions only. You can also make after-tax contributions to your 401(k). As of 2025, your 401(k) account can receive as much as $70,000 in contributions each year. This includes all the money deposited into the account—both from you and your employer.

For example, an employee contributes the maximum amount of pre-tax/Roth dollars ($23,500). Google matches 50% of that, which equals $11,750. In total, those contributions add up to $35,250—far short of the $70,000 limit. Therefore, this employee could still contribute another $34,750 in after-tax contributions to their 401(k) account.

Google also allows for in-plan Roth conversions, which completes the mega backdoor Roth strategy. You can learn more about the mega backdoor Roth strategy here.  

Analysis paralysis: the biggest threat to your retirement plan

A highly flexible retirement plan like Google’s can provide enormous benefits but can also feel overwhelming. Probably the most common way people learn valuable “hacks” about their employer’s plan is through their coworkers. But those coworkers aren’t privy to the whole picture.  

Consider the range of personal and professional questions you might be facing:  

  • How do you balance saving for shorter-term goals (wedding, kids, house, etc.) with making sure you are on track for retirement? 
  • How should your 401(k) be invested? 
  • Should you be making pre-tax or Roth contributions? 
  • Does maxing out after-tax contributions make more sense through your paychecks or using your annual bonus? How does this impact cash flow? 
  • Should you prioritize debt or your 401(k)? 
  • What should you do with your old 401(k) plans?  

Your answers to these questions should directly inform your planning decisions. And they should make you cautious about simply opting for the plan’s default options—or taking the same approach as your colleagues.  

Commas’ in-depth knowledge of Google’s retirement plan combined with our financial expertise and extensive array of quantitative tools, can help simplify, streamline, and maximize your specific retirement plan. We are here to help you navigate the complex, inter-related set of decisions that constitute retirement planning. 

Understanding Your Google Compensation Package

Posted on by Kelsie Joos

Landing a job at Google is a tremendous accomplishment. The company is not only a dynamic industry leader, staffed by innovative, top-of-the-line professionals. It also offers incredible salaries and a world-class benefits package.  

At Google, your total compensation is the sum of your base salary, bonuses, and RSU grants (dubbed GSUs by Google employees). Beyond that, Google offers some incredible benefits related to the Google 401(k), Health Savings Account (HSA) match, life insurance, and long-term disability.

  • Health Savings Account (HSA) Match = $1k for individual plans and $2k for family plans
    • Tip: you must be in a high deductible health plan (HDHP) to be able to participate in a Health Savings Plan (HSA). Due to the amazing tax advantages of the HSA account, we love to recommend this to clients, but that doesn’t mean it is right for everyone. Taking into consideration your providers, health needs, if you will be having a baby that year, etc. is very important. Here are some tips on choosing a health plan.
    • Tip: The $1k and $2k employer contribution that Google offers counts towards the annual contribution limit of $4,150 for an individual and $8,300 for a family (+ $1k catch up if over 55).
  • Life Insurance = 3x salary up to $789,000
    • Tip: Be sure to add beneficiaries to your Google life insurance policy so that it passes to the appropriate people if something happens to you.  
    • Tip: At Commas we will weigh if you need additional coverage – whether that is through voluntary coverage at Google or via the open market 
  • Long-term Disability = 65% salary 
    • Tip: There is no income cap on this, so the benefit will grow as your salary does. This is a benefit that you pay for however, that means that the benefit is tax-free to you if you need to claim disability.  

You can find more details about your specific benefits in Moma. When you are hired—and each year during open enrollment—you will make your benefit selections via gBenefits. Here at Commas, we are happy to help you make those choices and review them annually.  

Maximizing Your Awards

Think of the mix of salary, RSUs, and benefits that comprise your compensation as distinctive sources of wealth. Each has unique properties—advantages, as well as limitations—that enable you to achieve particular goals.  

The team at Commas has an in-depth understanding of Google’s multi-level incentive structure, and we can help you navigate and optimize your specific compensation package.   

Tying Equity Compensation to Your Financial Goals

Posted on by Kelsie Joos

Receiving company stock as part of your compensation package is a great perk offered by many companies. To maximize this benefit, it’s essential to plan ahead and make the most of your equity compensation by aligning it to your own financial goals.

“One thing I like to help clients think about is tying their equity compensation to their financial goals. We’ve had many clients who will use the proceeds from their stock awards to purchase a new home or to fund their kids education, so it’s really important to have a plan for your equity compensation and to know what you’ll do with the proceeds when you receive them.”

What Do You Need to Know About RSUs?

Posted on by Kelsie Joos

There are a lot of things to understand about Restricted Stock Units (RSUs). Hear from Commas advisor Katelyn on what they are and the 3 key dates associated with RSUs.

“There’s a lot of things to understand and know about restricted stock units or RSUs but here’s some of the highlights. RSUs are awards of company stock, given to attain and to attract key employees. These can be used instead of cash bonuses or alongside of cash bonuses as a way to compensate their employees as part of the entire compensation package. There are three key dates associated with RSUs: the grant date, the vesting period, and the vesting date.

The grant date is the day that your company grants you shares of the RSUs. This doesn’t mean that you necessarily have that company’s stock yet, but they’ve given you your award and told you how many shares to an expect and over what period of time. Then comes into play the vesting period every company is different, but this is the amount of time that must pass before you actually get those shares. This could be a cliff vesting schedule or it could be gradual vesting schedule but it’s going to vary from company to company. The vesting date is when you become an owner of those shares so they’re no longer RSUs, but actual shares of the company and at this time you can sell them or hold them or do whatever you like. There’s a lot more to know and understand about RSUs, especially around the taxation of them so if you have any questions don’t hesitate to reach out to your advisor”

Mega Backdoor Roths

Posted on by Kelsie Joos

The mega backdoor Roth strategy is a great option for high earners at a company that allows After-tax 401(k) contributions. Hear from Commas advisor Katelyn to learn why this may be the right choice for you.

“When you think about saving into a 401(k) plan, you traditionally think of making pre-tax or Roth contributions. But there’s another category called After-tax contributions and, in certain company 401(K) plans, After-tax contributions allow you to save above that limit and then we can convert those dollars into Roth. Roth is one of our favorite types of retirement accounts and so the more dollars we can get in there the better.

Examples of 401k companies that do this would be Google, Netflix, or Microsoft but it’s not exclusive to those large companies. It’s really important to look in your 401k plan document to see if these types of contributions are offered. Granted, we want to make sure that we’re prioritizing short-term goals and long-term goals, but if you have the capability to save more into retirement this is a great option for you.”