【文章內(nèi)容簡介】 ins in value of the underlying stock when the options are exercised. The question with them is how long to hold the option and take the tax hit at ordinary ine tax rates, and then hold on to the stock in hopes of future capital gains. If the executive defers exercising the options for several years and the stock appreciates significantly, the ultimate tax bite could put the executive far behind where he or she might have wound up by exercising the option early, then selling the stock with a significant (more moderately taxed) capital gain. On the other hand, if the client exercises the option relatively soon and pays the tax, only to witness the stock collapse, he will be kicking himself for not holding on to the option and exercising it if the gain, on an aftertax basis, is adequate to meet a particular financial objective. If you39。re riskaverse and you want to keep your options open, says Schneider, you39。re going to hold on to the options as long as possible until you get close to their expiration. A mon sense thing to do for the client is to say, 39。Okay, if you have you’re your financial goals funded [from other assets], go ahead and hold on to the options longer because it39。s not going to impact your goals in the long run. But if you don39。t yet have enough money for retirement or to pay for college, then you39。d better be thinking about taking it off the table. In analyzing such decisions, though, planners must not overlook the effect of the financial leverage inherent in options, cautions Aspirant’s Gout. Even if they39。re taxed at ordinary ine rates, the value of the leverage that39。s involved is just incredible, he says. Scandals39。 Aftermath The same valuation issue applies to restricted stock grant programs—an executive pensation tool more favored by many corporations today than stock option grants, for a variety of reasons. One is the lingering memory and heightened shareholder and regulatory scrutiny of corporations following scandals a decade ago, largely attributable to top executives being obsessed by driving up share prices with scant regard to the pany39。s longterm financial health. While executives covered by restricted stock programs are still incentivized to drive up share prices, the reduced leverage of these programs may blunt that motivation to some degree. In addition, linking executives39。 share grants to corporate performance metrics— socalled performance share programs— have also bee popular, notes Charles Steele, CFP174。, of SFG Wealth Planning Services Inc. An example of a typical performance formula offered by Steele: earnings per share growth averaging 8 percent annually over the next three years. There is more risk to the executive since the heyday of whopping options grants, Steele says. Restricted stock is typically less attractive than options from the executive39。s point of view, explains Schneider, because in addition to lacking the leverage benefit of options, the value of restricted stock is immediately taxable at ordinary ine tax rates when the shares vest. (Any subsequent appreciation on pany stock held by the executives after the shares vest would be taxed as capital gains.) However, one potential taxsaving tool is available to executives covered by restricted stock programs, according to Cyndi Trotsky, CFP174。, CPA/PFS, of Bandai Wealth Advisors. If they haven39。t vested yet, there is an election they can make called an 83(b) election, she says. Acceler