By Eric Loftus, CFP®
A better job offer arrives. More responsibility, a higher salary, a company you are genuinely excited about. And then you remember the equity you would leave behind, and the decision suddenly feels a lot less simple.
This can be one of the most consequential moments in an executive’s financial life. It happens the day an offer lands, and the choices you make in the following weeks are difficult to undo. Handled well, your equity becomes information and leverage. Handled poorly, it can either keep you in a role you are ready to leave or become compensation you simply walk away from.
The Golden Handcuffs Problem
Unvested equity is designed to keep you. That is not a criticism, it is the entire point of the structure. Grants vest over years precisely so that leaving means forfeiting whatever has not vested yet.
The result is what people call golden handcuffs. You may want to move, but a large block of stock is set to vest in the coming months or years, and leaving means giving it up. The pull is real, and for some people it is the right reason to stay a while longer. But it should be a decision made with a clear number in front of you, not a vague sense that you would be walking away from something big. The goal is not to avoid leaving equity behind at all costs. It is to understand what you are giving up so that your equity does not quietly make the career decision for you.
Put a Real Number on What You Would Forfeit
The first move is to stop thinking in feelings and start thinking in figures.
“I would be giving up a lot of stock” is not something you can weigh against a job offer. A dollar figure is. That means sitting down and quantifying what you would actually forfeit: how many unvested shares or options you hold, when each tranche would vest, and what they are reasonably worth, with a clear-eyed view rather than an optimistic one. Private company shares deserve particular caution here, because a headline valuation is not the same as money you can count on.
But what you are giving up is only one side of the equation. Many executive offers already include a new equity grant, and that needs to be evaluated alongside the equity you are leaving behind. Compare the value, vesting schedule, type of award, liquidity, and potential upside of each. A $200,000 grant at your current employer is not necessarily equivalent to a $200,000 grant at the new one, particularly when comparing public and private company equity.
Once you understand both sides, the comparison becomes much clearer. Sometimes the equity you are forfeiting is smaller than it felt, especially when weighed against the new grant and broader compensation package. Sometimes there is still a meaningful gap. In that case, the answer may be to wait for an upcoming vesting date or determine whether some or all of that value can be addressed in the new offer.
Which brings us to the part most people miss.
Turn Forfeited Equity Into a Negotiating Lever
Here is the shift in mindset. The equity you would leave behind is not just a loss. It is also a number you can bring into the negotiation with your prospective employer.
Companies recruiting executives away from existing equity compensation may have several ways to bridge the gap. A signing bonus can offset value vesting soon. A replacement equity grant can substitute for some of what you are forfeiting. A structured arrangement can provide additional compensation over the first year or two to help replace what you gave up. These can all be reasonable points of negotiation. But the conversation is much stronger when you walk in with the hard valuation from the previous step, because you are asking the new employer to address a specific figure, not a feeling.
This single reframe, from “I am giving up stock” to “here is the value I need to replace,” can materially change the negotiation.
Leaving With Vested Options: The 90-Day Clock
When you leave a company, you typically have a limited window to exercise vested options. For incentive stock options, exercising within three months after leaving is generally required to preserve their favorable ISO tax treatment. Depending on the terms of your plan, options that are not exercised within that window may expire or remain exercisable but lose their ISO tax treatment. Your specific grant and plan documents control the actual exercise period, so it is worth checking before you resign, not after.
That short clock can force a real tradeoff, especially at a private company. Exercising may mean paying the strike price out of pocket to own shares you still cannot readily sell. You could be writing a significant check to convert liquid savings into an illiquid, uncertain holding. And depending on the value of the shares at exercise, an ISO exercise can also create alternative minimum tax implications.
Sometimes that is a worthwhile investment in a company you believe in. Sometimes the smarter move is to let some or all of the options go. The point is that it should be a deliberate choice, not a panic decision compressed into a few weeks.
Model the Tax Before You Resign
There is one more piece that belongs before the resignation letter, not after: the tax.
Exercising incentive stock options can create an alternative minimum tax adjustment and potentially a tax bill even though you have not sold the shares or received any cash. Layer that on top of the strike price you are already paying, and the true cost of holding onto your equity can be much higher than the exercise price alone. Nonqualified stock options carry their own tax consequences, generally creating ordinary income on the spread at exercise.
This is exactly the kind of decision you want modeled while you still have choices. Understanding the potential AMT exposure and total cost before you give notice can change the strategy entirely—from how many shares you exercise, to when you exercise them, to whether keeping the equity makes sense at all.
Making the Call With Confidence
A job change is exciting and stressful, and the equity questions tend to be the ones that keep people up at night. They do not have to be. With the forfeiture quantified, the negotiation reframed, the 90-day window mapped, and the tax modeled, the decision becomes something you can make with confidence rather than dread.
At Wealth Dimensions, this is the work we do with executives in transition, and we coordinate directly with your CPA so the tax and the equity are one plan rather than two. If a move is on your horizon, the best time to look is before you give notice. And even if a transition is not imminent, understanding your equity today can help you prepare for opportunities and make better decisions when they arise.
Frequently Asked Questions
What are golden handcuffs?
Golden handcuffs describe the pull of unvested equity and other compensation that can make leaving a job costly, because whatever has not vested may be forfeited when you go. The structure is designed to retain you. The key is to quantify exactly what you would give up so the decision is made against a real number, which is something Wealth Dimensions helps executives do.
Can I negotiate to replace equity I would forfeit by changing jobs?
Often, yes. Employers may offset forfeited equity with signing bonuses, replacement grants, or other compensation, but you need a clear valuation of what you are leaving behind to make the ask credibly. At Wealth Dimensions, we help executives build that number before they negotiate.
How long do I have to exercise stock options after leaving a company?
Your specific plan and grant documents control the exercise window. For incentive stock options, exercising within three months after leaving is generally required to preserve their favorable ISO tax treatment. Depending on your plan, options that are not exercised within that period may expire or remain exercisable but lose their ISO tax treatment. Exercising can also carry significant cash and tax costs, so it is worth modeling before you resign. Wealth Dimensions helps clients work through these decisions alongside their CPA.
About Eric
Eric Loftus, CFP®, ECA, is a partner and financial advisor at Wealth Dimensions, an independent wealth management firm based in Cincinnati, Ohio. He works with individuals and families on financial planning and investment strategy, serves on the firm’s investment committee, and helps lead its marketing efforts. Eric joined Wealth Dimensions in 2009 after earning his bachelor’s degree in business administration from The Ohio State University’s Fisher College of Business and holds the CERTIFIED FINANCIAL PLANNER® and Equity Compensation Associate (ECA) designations.