Who We Serve
Corporate Executives – Stephen, the Executive Vice President
Stephen, an Executive at a large pharmaceutical company, was referred to Rockwood by a long-standing client. Stephen recognized that his complex financial situation required advanced planning beyond the capabilities of his current broker, who was mainly concerned with discussing the merits of buying a handful of tech stocks and chasing hot investment trends. Stephen was looking for an advisor who could coordinate and assimilate the various facets of his financial life, including his investment portfolio.
Critically, a sizable percentage of Stephen’s net worth was tied to his employer as he accumulated large positions in his company's Non-Qualified Stock Options, Restricted Stock Units, Employee Stock Purchase Plans, and Non-Qualified Deferred Compensation plans. He even maintained shares of company stock inside his 401(k), which further contributed to unnecessarily high levels of single-company-risk.
After reviewing his goals, we laid out a structured and logical diversification strategy for the various employer stock holdings to mitigate his concentrated single-stock exposure. To reduce taxes, we helped Stephen with the decision to elect to defer some of his salary and bonus into the company’s Non-Qualified Deferred Compensation plan, walking him through a multi-decade tax projection to illustrate the impact of this decision.
Moreover, after reviewing the entirety of his financial picture, Rockwood uncovered that Stephen was woefully underinsured from a Life and Disability Insurance perspective and assisted him with placing a low-cost Term Life Insurance policy and supplemental Long-term Disability Income Insurance policy to ensure that his wife and three boys were well supported if he were to pass away or become disabled.
The confidence that he was able to derive in his long-term financial trajectory, through the partnership with Rockwood, lead him to spend more time on what was most important to him, spending time with his family at their home in Avalon, NJ.
The storylines above approximate subcategories of the broad client demographic with whom we work. These parables are intended to reflect a typical client relationship; however, nothing contained herein represents a statement of a client’s experience with or endorsement of our firm.
Frequently Asked Questions
How do you help executives manage concentrated stock and equity compensation?
A: We help executives build a structured diversification plan for Non-Qualified Stock Options (NQSOs), Restricted Stock Units (RSUs), Employee Stock Purchase Plans (ESPPs), and company stock held in 401(k)s. Our goal is to reduce single-company risk while minimizing taxes and aligning each decision with your long-term financial objectives.
Can you help me decide whether to defer salary or bonuses into a Non-Qualified Deferred Compensation plan?
A: Yes. We model the long-term tax implications of deferring compensation and help you determine how much, and when, to defer. Through multi-year projections, we show how deferrals interact with your broader financial plan so that your choices are tax-efficient, intentional, and consistent with your goals.
I hold company stock in multiple accounts—can you coordinate all of them?
A: Yes. We help consolidate your equity positions across 401(k)s, brokerage accounts, and employer plans to create one clear picture of your exposure. Then, we implement a disciplined, evidence-based diversification and rebalancing strategy to help keep your portfolio aligned with your risk tolerance and life goals.