Financial Planning for Boise-Area Public Company Executives

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Boise, one of America’s fastest-growing cities and Idaho’s largest, is emerging as a hub for public companies and high-growth employers. This growth brings executives with complex financial situations involving equity compensation, concentrated stock positions, and multi-state tax exposure. Strategic financial planning is important to navigate these complexities and achieve long-term goals.

Understanding Executive Compensation Packages

Executive compensation packages vary by role and year, but they typically include a base salary of $200,000–$400,000, bonuses ranging from $300,000–$1,000,000, and equity awards such as Restricted Stock Units (RSUs), Performance Stock Units (PSUs), Non-Qualified Stock Options (NQSOs), Incentive Stock Options (ISOs), or deferred compensation. Equity often forms the largest portion of compensation, aligning executive pay with company performance through stock price appreciation. Managing these awards strategically is key to wealth building and tax mitigation.

Managing Equity Compensation Strategically

Equity compensation requires careful planning due to varying tax treatments and strategic considerations:

• Restricted Stock Units (RSUs): RSUs are taxed as ordinary income upon vesting, with 22% (under $1 million of supplemental income) or 37% (over $1 million of supplemental income) federal taxes typically withheld (some companies allow adjustments). You can sell shares immediately without additional taxes or hold them for over a year to qualify for long-term capital gains rates (15%–20%, depending on income). If the stock declines post-vest, selling at a loss enables tax-loss harvesting to offset other portfolio gains.
• Performance Stock Units (PSUs): PSUs, granted based on performance, are taxed like RSUs upon vesting.
• Non-Qualified Stock Options (NQSOs): NQSOs involve an exercise price and fair market value. For example, with 500 shares at a $50 exercise price and a $300 fair market value, exercising costs $25,000 (500 × $50), yielding a $125,000 taxable gain (500 × $300 - $25,000). Taxes aren’t withheld automatically, so consult a tax advisor about quarterly payments. A cashless exercise avoids out-of-pocket costs but triggers taxes on the full gain.
• Incentive Stock Options (ISOs): ISOs are complex, but they do offer tax advantages. Exercising without selling avoids ordinary income tax, but you must fund the exercise (e.g., $25,000 for 50 shares at $50). Holding shares for one year post-exercise, and two years post-grant, qualifies gains for long-term capital gains rates (up to 20% vs. 37% ordinary income). However, exercising triggers Alternative Minimum Tax (AMT) calculations on the spread between exercise price and fair market value, potentially requiring cash to cover taxes without liquidity from a sale. Coordinate with a financial planner and accountant to manage AMT risks.

A key decision is whether to hold or sell vested equity. Consider: if you had the after-tax value of vested RSUs (e.g., $63,000 after 37% tax on $100,000) in cash, would you buy your company’s stock? If yes, hold the shares; if no, sell and diversify. For ISOs, work with an accountant to assess AMT and optimize tax treatment, balancing the risk of stock price declines against potential tax savings.

Executives often face concentration risk, with significant wealth tied to one company’s stock. While stories of millionaires holding equity abound, many have faced financial ruin from a lack of diversification. A common guideline is to limit any single stock to 10% of your portfolio. If diversified savings and retirement plans are on track, you may tolerate more concentration risk but understand the stakes. Tax considerations, such as harvested losses, marginal tax rates, and short- vs. long-term capital gains, must also inform your strategy.

Tax Considerations for Boise Area Executives

Taxes are a major concern for executives navigating complex compensation. The federal tax code offers opportunities to minimize liability:

• Pretax Contributions: Maximize contributions to 401(k)s, Health Savings Accounts (HSAs), and deferred compensation plans to reduce taxable income. In 2025, 401(k) limits are $23,500 (under 50), $31,000 (50+), or $34,750 (60-63). 
• Tax-Loss Harvesting: Sell stocks at a loss to offset gains elsewhere. Instead of an S&P 500 ETF, holding individual stocks allows more opportunities to harvest losses, boosting tax efficiency.
• Charitable Giving with Appreciated Stock: Donating appreciated stock avoids capital gains taxes and provides a deduction for the full value. For example, donating $100,000 of stock (with a basis of $20,000) saves taxes on the $80,000 gain and offers a $100,000 deduction. Avoid gifting cash to charity when highly appreciated stock is an option.
• Donor-Advised Funds (DAFs): In high-income years, contribute to a DAF for an immediate tax deduction, while deferring charitable distributions. For instance, a client with a $500,000 bonus contributed $200,000 to a DAF, saving $74,000 in federal taxes (37%) and $10,600 in Idaho taxes (5.3%), effectively prepaying 10 years of $20,000 annual donations. Options are saving $84,600 or giving more to charity using your tax savings. This “give more without giving more” strategy maximizes tax savings.
• 83(b) Elections: For restricted stock vesting over years, an 83(b) election allows paying taxes on the grant’s value upfront. If the stock appreciates significantly, future gains are taxed at capital gains rates, not ordinary income. However, this carries risks if the stock declines, and you need cash to cover taxes. Evaluate cash flow, stock growth potential, and tax rates with professionals, especially during recessions when stock prices may be lower.

One more consideration for exercising stock is income for the current year. Many executives’ bonuses are dependent on how well the company performs. If there is a down year in the company, bonuses may be reduced, which provides an opportunity to potentially sell or exercise stock at a lower marginal tax rate, optimizing tax outcomes. 

Retirement and Investment Planning Beyond the Company Plan

Beyond company plans, executives should optimize retirement and investment vehicles:

• 401(k) Plans: In 2025, contribute up to $23,500 ($31,000 if 50+ or $34,750 between 60-63) pretax or Roth. The “Mega Backdoor Roth” allows after-tax contributions up to $70,000 (or $77,500 if 50+), including employer matches. Convert after-tax contributions to a Roth 401(k) for tax-free growth, with minimal tax due if converted immediately. Consult your plan custodian to execute this.
• Deferred Compensation (409A) Plans: Available to highly compensated employees, these plans defer income to lower tax years. Ensure deferrals align with future Required Minimum Distributions (RMDs) to avoid excessive tax burdens.
• Non-Qualified Investment Accounts: These offer liquidity without penalties (unlike 401(k)s before age 59.5) and enable tax-loss harvesting. Proper asset location across accounts maximizes tax efficiency.

Pretax 401(k) contributions offer tax deductions and deferred growth, but overdeferring can inflate RMDs at age 75, potentially pushing you into higher tax brackets. Roth and non-qualified accounts, with no RMDs, provide tax diversification. Balance these options with a fiduciary to align with your goals.

If leaving a company, evaluate whether to roll a 409A plan to an IRA, take a lump sum, or receive installments. Rolling to an IRA suits long-term investing, while installments may support retirement income needs.

Coordinating Compensation with Estate and Legacy Planning

Estate planning is often overlooked. Many executives lack updated wills/trusts or fail to fund trusts by titling assets (e.g., real estate, investment accounts, insurance) correctly. A fiduciary, estate attorney, and accountant can allow for a proper setup.

For families with young children, trusts can restrict asset access until a specified age, avoiding Idaho’s default, where minors gain full control at 18. Gifting is another strategy: in 2025, you can gift $19,000 per person ($38,000 for couples) without tax reporting. Gifts exceeding this reduce your $13.99 million lifetime estate/gift exemption, posing no immediate tax consequence for most.

For estates nearing the $13.99 million per person exemption, strategies like Spousal Lifetime Access Trusts (SLATs) can potentially save millions in taxes. Charitable strategies, such as lumping donations into a DAF, also reduce taxable estates while supporting causes. For example, donating $400,000 of appreciated stock to a DAF provides a large deduction, avoids capital gains taxes, and allows a tax-free Roth conversion of equal value.

Risk Management and Liquidity Planning

Market volatility and employment changes underscore the need for broad insurance coverage, asset protection, and liquidity reserves for Boise area executives. Comprehensive insurance, including umbrella liability policies, safeguards against unforeseen risks, while asset protection strategies shield wealth from lawsuits or business downturns.

Strategic tools enhance resilience. A 10b5-1 trading plan allows preset stock sales during blackout periods, ensuring compliance and liquidity despite insider information restrictions. Tax-efficient borrowing from a line of credit on a non-qualified investment account provides cash during a market downturn without triggering immediate tax liabilities or selling equities at a loss. Pairing this with umbrella liability, life, and disability insurance offers additional protection against personal or professional risks.

Flexibility is key for career transitions or corporate events like mergers and acquisitions. Maintaining liquid assets and adaptable financial plans allows executives to pivot during layoffs, relocations, or ownership changes, preserving wealth and supporting new opportunities. Collaborate with a fiduciary to tailor these strategies to your evolving career and market conditions.

Why Boise’s Growing Executive Community Faces Unique Planning Challenges 

Boise’s lower cost of living compared to other corporate hubs is an advantage, but executives often oversave or misallocate investments. A fiduciary can help assess whether you’re saving excessively, potentially redirecting funds to gifting, charity, or experiences that enhance life. Questions like “Are we saving to be the richest in the graveyard?” or “Should we gift to children early?” guide holistic planning.

Financial Planning for Boise Area Public Company Executives FAQs

• How are RSUs taxed when they vest? RSUs are taxed as ordinary income upon vesting, with 22% (under $1 million of supplemental income) or 37% (over $1 million of supplemental income) federal taxes typically withheld (adjustable at some companies). Holding shares over a year qualifies gains for lower capital gains rates. 
• What’s the benefit of a 10b5-1 plan for executives with blackout periods? Blackout periods restrict trades due to insider information. A 10b5-1 plan enables preset trades during these periods, offering legal protection against insider trading violations. 
• Can I gift appreciated company stock to reduce taxes? Yes, gifting avoids capital gains taxes and provides a deduction for the full value, offering double savings. Use stock over cash and consider bunching gifts for larger deductions. 
• How does Idaho’s state income tax affect capital gains from equity compensation? Idaho applies a flat 5.3% state tax to equity compensation gains. 
• Should I roll over my deferred compensation plan if I leave the company? It depends. Roll to an IRA for long-term growth, take a lump sum, or opt for installments for retirement income. Assess your goals with a professional. 
• What are the common estate planning mistakes do public company executives make? The biggest issue is a lack of an estate plan or not funding trusts by titling assets. A team with an attorney, advisor, and accountant can address this.

How We Help Boise Executives Build, Manage, and Protect Their Wealth

A comprehensive financial plan integrates base compensation, equity awards, company benefits, 401(k), and non-qualified account management, tax strategies, and estate planning. While market returns are unpredictable, tax and estate rules are known, and we optimize them to your advantage. Our goal is to align your wealth with liquidity needs, equity management, and legacy objectives, turning leadership success into financial independence.

Every executive’s financial journey is unique. If you’re ready to explore strategies tailored to your goals and circumstances, let’s start a conversation. Together, we’ll optimize your compensation, equity, and legacy planning, so you can focus on leading with confidence and building lasting financial independence.

Sources: 

https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000

https://www.irs.gov/faqs/interest-dividends-other-types-of-income/gifts-inheritances/gifts-inheritances-1

https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax

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