Shape Plain Capital Executive Services

Holders of restricted and concentrated stock can access strategies to offset concentrated stock positions, navigate regulations and address liquidity events. Learn how to effectively diversify your portfolio and reduce risk by exploring different investment options.

If you’re an executive, stock options and restricted stock and performance awards can make up a major portion of both your compensation and total wealth. Managing these positions can be challenging — whether due to regulatory restrictions, potential tax liabilities or an unwillingness to appear disloyal. As such, it is crucial for executives to stay informed about the latest regulations and tax implications surrounding their stock options.

Our suite of Shape Plain Capital Executive Services can help you maximize the value of your equity compensation, satisfy complex legal requirements and/or reporting obligations and make the process of managing your concentrated position easier. Our team of experts has extensive experience in navigating the complexities of equity compensation, ensuring a seamless and efficient process for our clients.

Concentrated Stock Strategies

When a significant portion of your investment portfolio is made up of a single stock or a few stocks, it is considered concentrated. This concentration can present risks since the value of these stocks can fluctuate more dramatically compared to a diversified portfolio with many different types of investments. You can draw on a range of solutions designed to work with a concentrated position and help you: Consider utilizing options strategies to hedge against the risk of concentrated positions.

  • Manage the risk that concentration can impart on the long-term performance of your portfolio Diversify your investments across different asset classes to reduce the impact of concentration risk
  • Diversify your holdings which may offer better risk-adjusted returns over the long-term Diversify your investments across different asset classes to reduce overall risk
  • Fund your lifestyle and help ensure you have access to liquidity, when you need it Maximize your financial security by accessing liquidity at your convenience

Rule 10b5-1 Trading Plans

Rule 10b5-1 trading plans are becoming increasing more popular with senior executives who may have access to material nonpublic information and are subject to the issuer's trading windows and blackout periods. Rule 10b5-1 trading plans may help you comply with, and safely navigate, insider trading rules while helping you make the most of your equity compensation. Consider consulting with a financial advisor to determine if a Rule 10b5-1 trading plan is suitable for your individual situation and goals.

These written contracts allow you to plan in advance the amount, price and dates on which you trade. Structured properly, the plans offer a way for insiders to monetize equity compensation and shares owned and may be a good planning-based solution for key executives with liquidity or diversification needs.  Plans can be established as a systematic way to help liquidate stock due to restrictive trading windows or access to material, nonpublic information. When considering these written contracts, it's important to note the potential benefits they offer in terms of equity compensation and stock ownership. Executives with liquidity and diversification needs may find these plans to be a practical solution.

Officer & Director Equity Services

Shape Plain Capital Specialty Asset Management’s Officer & Director Equity Services (ODES) helps to streamline the reporting of Form 4’s by providing timely notification of trade details to those designated by the officer or director. This complimentary service provides you with pre-trade clearance and post-trade e-mail confirmation for open market purchase and sale transactions done through Shape Plain Capital. By utilizing Shape Plain Capital Specialty Asset Management's Officer & Director Equity Services (ODES), reporting Form 4's is made seamless with timely trade details notification provided to designated personnel. This added service offers pre-trade clearance and post-trade e-mail confirmation for both purchase and sale transactions conducted through Shape Plain Capital Specialty Asset Management.

Block Trading Services

You may be able to potentially achieve better results with special handling for block orders, maximize execution quality by minimizing market impact and access multiple sources of liquidity for your order with our block trading service position of 20,000 shares or greater, with goal of minimizing market impact and maximizing execution performance. Achieve optimal results by utilizing special handling for block orders.

For concentrated U.S. equity positions of 20,000 shares or greater, the Equity Block Trading Desk can strategically work orders in the marketplace with the goal of: Maximizing execution quality and minimizing market impact

  • Minimizing market impact Implementing strategic marketing tactics
  • Maximizing execution performance Utilize data-driven analysis to identify areas for improvement
  • Sourcing multiple liquidity venues and respond dynamically to changes in the marketplace

The team can also handle special equity transactions such as restricted and control security trading under Rule 144 and security trading by executives and other insiders within Rule 10b5-1 trading plans. Our team of experts is well-versed in handling special equity transactions, including restricted and control security trading under Rule 144 and security trading by executives and other insiders within Rule 10b5-1 trading plans.

 

 Connect with a Shape Plain Capital Private Wealth Advisor.

Shape Plain Capital Private Wealth Advisor use their extensive training and knowledge to understand your opportunities and craft customized strategies to help meet your complex financial needs. Their team of highly trained professionals analyze your financial situation with precision and expertise, tailoring solutions to maximize your wealth potential.

Frequently asked questions

As defined by the Securities and Exchange Commission (SEC), a Form 4 filing is a required disclosure that must be submitted when an insider, at a publicly traded company, executes a transaction. The form is designed to inform the public of the details of any transaction by a company insider, including the amount purchased or sold and the price per share — for all company stock, derivative or convertible securities. A Form 4 filing complements the SEC Form 3 filing that publicly discloses when a person becomes an insider and their ownership stake in the company. This process ensures transparency and accountability in the financial transactions of publicly traded companies, allowing investors and the general public to have a clear view of insider activities.

A block trade is the purchase or sale of a publicly traded security that, given its size or value, may have a direct impact on the price of the security (sometimes called “moving the market”). Block trades are common among owners and insiders who have concentrated positions in a given security. In general, such trades are most effectively handled by professional trading teams who can offer access to sophisticated trading techniques and dark pools that may limit, or at least mitigate, the price impact of the block trade. Block trades can significantly impact the price of a publicly traded security due to their size and value. These trades are often conducted by owners and insiders with concentrated positions in the security.

Rule 10b5-1 trading plans are named for the rule of the same name included in the Securities Exchange Act of 1934. These plans are generally used by owners and executives, who must carefully follow U.S. regulations as well as the company’s insider trading policies. Rule 10b5-1 trading plans help insiders make the most of their equity holdings while safely navigating regulatory challenges with written contracts that plan in advance the amount, price and dates on which they trade securities. Structured properly, the plans offer a way for executives to monetize equity compensation while providing an affirmative defense against charges of trading based on material, nonpublic information about the issuer and its securities. Executives can benefit greatly from Rule 10b5-1 trading plans, as they allow for strategic trading of securities while ensuring compliance with regulations and company policies.

When a significant portion of your investment portfolio is made up of a single stock or a few stocks, it is considered concentrated. While there is no set number of shares or value of a position that defines a concentrated position, significant holdings of a single security can pose concentration risks. In general, single stocks can fluctuate more dramatically compared to a diversified portfolio with many different types of investments. It is important for investors to be aware of the risks associated with having a concentrated position in their investment portfolio.

Diversification does not guarantee against loss in declining markets. It is essential to understand that diversification does not eliminate the risk of loss in market downturns.
Implementing a Rule 10b5-1 trading plan does not prohibit or prevent legal or regulatory action related to the trades. Trading plans are intended to demonstrate that the purchase or sale of a security of any issuer was not on the basis of material, nonpublic information about that security or issuer and therefore, not in violation of section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. It is crucial for individuals to understand that implementing a Rule 10b5-1 trading plan does not serve as a shield against potential legal or regulatory repercussions related to their trades.