The winding road of equity compensation planning
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Days after saying “I do”, Emily Van Hoorickx pulled out a map to help find her new office in Silicon Valley. The map would later come in handy when her boss would tell her, “Go to San Jose. That’s where the wealthy people live.”
Ms Van Hoorickx, now celebrating her 40th year as a financial adviser, says, “Back then, I would take just about any client I could get.”
While a trainee at Kidder Peabody & Co in the 1980s, she recalls how one colleague received more phone calls than he could handle, so she offered to take the ones he could not deal with.
That is how she began advising clients on handling stock options and other equity compensation schemes. Now a UBS adviser in Silicon Valley, she personally advised on $6.5bn worth of assets under management last year. Since the start of 2020, her investment group has combined with a large equity compensation team in Century City.
When she first fell into the niche, she enjoyed advising engineers, most of whom wanted to learn more about their stock options. “They were super smart, but they didn’t know anything about finance,” she says. “They liked that they could ask me anything about how to get started.”
The use of stock options is not as common as it once was, as more tech companies have steered toward offering restricted stock and time-based pay. But as the number of equity compensation vehicles has broadened, so has Ms Van Hoorickx’s knowledge and qualifications on the subject.
“It was a concerted decision that I would pursue this and get the extra education I needed,” Ms Van Hoorickx says. “I decided that there would be more liquidity in it and a greater opportunity earlier if I focused on equity comp [compensation] versus the 401k [retirement planning] side.”
Most of the individuals she works with today are tied to a corporate client and receive restricted stock units or are part of employee stock purchase plans.
With ESPPs, she says most of the employee’s net worth is tied to his or her company. Her role is to help clients reach their goals “in a tax and cost-efficient manner with the least possible risk”, best achieved when employees participate “as fully as possible in employer-provided benefits programmes”.
But there is a balance to be struck between having wealth tied up in stock and ensuring enough cash on hand to meet clients’ immediate needs.
Just as early in her career, Ms Van Hoorickx likes being able to speak directly to employees — something she says has become easier in the past decade. Whereas 10 years ago, she faced resistance from corporations, Ms Van Hoorickx says many businesses are now open to having employees seek guidance from financial advisers directly.
“It seems that we are now democratising advice,” she says. “Financial advice is not just for super wealthy executives, we can now help everyone.”
Just as equity compensation plans have changed during her career, so too have relevant qualifications. In 1993, Ms Van Hoorickx was part of the first graduating class to receive the Certified Equity Professional designation from the Silicon Valley Executive Center at Santa Clara University.
Now her daughter is among the early group of advisers to receive the “more accessible” designation of equity compensation associate, a prerequisite for the CEP. Ms Van Hoorickx says it has been refreshing to have daughter Madeline join the practice. “It’s so much fun to work with her. She sees things differently than I do,” she says.
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