Contracts and stuff are great and all, but have you ruled out doing it the dumb way? (dumb in opposite-of-clever sense)
IMO, the dumb way of decoupling equity compensation from decision-making is to pre-make your decisions about it, and then think about it as little as possible going forward.
My “do it the dumb way” rule around ESPP comp is to max my contribution, then sell as soon as legally possible and take the tax hit, and not try to meta-game whether or not I’d be better off holding it then selling later. I budget the ESPP as I would any other likely-but-not-guaranteed bonus of unknown size.
My “do it the dumb way” rule around equity packages is to never sell during the capital gains period. Then once it’s out of capital gains and I form a long-term financial goal for it, I set a ~multi-month “sell at this price” order for what feels like a good but realistic price, and then it sells itself automatically when it gets to that price and I put it toward the long-term goal.
Your “do it the dumb way” around equity might be pre-committing to sell it all as soon as it gets out of the capital gains period, then maybe keep a fixed dollar amount, and donate the rest to a charity of your choice (as you might budget any other windfall). There’s a certain kind of emotionally giving up on solving the problem perfectly that you might be able to do—acknowledge that investing extreme mental effort in figuring out whether you’re doing it optimally would actually be so costly that it drags you further from optimal in other, more important areas of your work.
Basically, you might be too smart/knowledgeable/whatever for this to work, but maybe you can do it the dumb way? Take a comp package that would be satisfactory without the equity, precommit to what you’ll do with your equity at specific times regardless of the stock’s performance, and then just execute the pre-selected algorithm and taboo further optimization attempts around it.
Contracts and stuff are great and all, but have you ruled out doing it the dumb way? (dumb in opposite-of-clever sense)
IMO, the dumb way of decoupling equity compensation from decision-making is to pre-make your decisions about it, and then think about it as little as possible going forward.
My “do it the dumb way” rule around ESPP comp is to max my contribution, then sell as soon as legally possible and take the tax hit, and not try to meta-game whether or not I’d be better off holding it then selling later. I budget the ESPP as I would any other likely-but-not-guaranteed bonus of unknown size.
My “do it the dumb way” rule around equity packages is to never sell during the capital gains period. Then once it’s out of capital gains and I form a long-term financial goal for it, I set a ~multi-month “sell at this price” order for what feels like a good but realistic price, and then it sells itself automatically when it gets to that price and I put it toward the long-term goal.
Your “do it the dumb way” around equity might be pre-committing to sell it all as soon as it gets out of the capital gains period, then maybe keep a fixed dollar amount, and donate the rest to a charity of your choice (as you might budget any other windfall). There’s a certain kind of emotionally giving up on solving the problem perfectly that you might be able to do—acknowledge that investing extreme mental effort in figuring out whether you’re doing it optimally would actually be so costly that it drags you further from optimal in other, more important areas of your work.
Basically, you might be too smart/knowledgeable/whatever for this to work, but maybe you can do it the dumb way? Take a comp package that would be satisfactory without the equity, precommit to what you’ll do with your equity at specific times regardless of the stock’s performance, and then just execute the pre-selected algorithm and taboo further optimization attempts around it.