MEDIA

Spaced Out from Stock Options

A case study on the opportunities and challenges of SpaceX employee stock option planning

By Eric C. Pritz, CFP®, CMFC®
Partner

Kyle Demshki, CFP®
Advisor

Executive Summary

Employee stock options are a mystical component of the corporate compensation package. Employees are often recruited and rewarded for their hard work with the mighty “E” word; equity. Excitement builds as the value of the company’s stock grows parallel to the success of the organization. Soon enough, employees of many different compensation levels and hiring dates have enough employee stock options to think about accomplishing their goals, such as purchasing a home or retirement. But as the old saying goes, “don’t put all your eggs in one basket.” Case in point, “since the early 1980s, 40% of all companies experienced a severe loss and never recovered.”1 You don’t invest your whole 401(k) into one stock, right? We extend the same philosophy to a client’s entire financial picture. Your employee stock options made you money, but now it is time to preserve your money by taking some gains and investing in other sectors of the market and other asset classes.

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