When your company is doing well, holding stock can feel like a reward for your loyalty and hard work. Whether through stock options, RSUs, or employee stock purchase plans (ESPPs), owning shares of your employer’s stock can be an exciting opportunity to participate in the company's growth.
But as with any investment, too much of a good thing can become a risk.
If you’re wondering, “Should I sell my company stock?”—you’re not alone. Many employees wrestle with this question, especially when their employer’s shares start to make up a large portion of their net worth.
It can feel like a personal, emotional, even moral decision. But when it comes to long-term personal finance, the better question is:
Does holding this much stock in a single company align with my financial goals, risk tolerance, and broader investment strategy?
In this article, we’ll walk through the risks of over-concentration, offer a simple decision tree to guide your next move, and explore how thoughtful wealth management can turn your equity compensation into a valuable part of your future.
Stock-based compensation is a powerful tool—when managed well. It can be a lever for building wealth, funding early retirement, or covering large future expenses. But if your company stock becomes too large a portion of your overall portfolio, it exposes you to concentration risk.
This happens when a single stock makes up a disproportionate share of your investments. The stock market rewards diversification and being overly reliant on one company—especially the one that already provides your paycheck—can make you more vulnerable than you think.
Here’s why this matters:
We often meet clients who haven’t thought of their employer’s stock as part of their broader financial planning strategy. Instead, it sits in a separate mental bucket—appreciated but not integrated. That’s a missed opportunity.
Equity should be treated like any other asset: assessed for risk, return, and how well it fits into your plan for the short-term, the long term, and everything in between.
Here’s where equity fits into the bigger picture:
Still not sure where to begin? That’s where our decision tree comes in.
We've created a simple, downloadable resource to help you think through your current stock position and make a more confident decision.
You’ll walk through questions like:
Let’s break down the key considerations that make up this tool.
This is the starting point for evaluating your exposure. While there’s no perfect threshold, we typically recommend keeping individual stock positions below 10–15% of your total investment holdings.
If your company stock exceeds that, it may be time to explore diversification. Selling some shares and reallocating into a diversified portfolio can help reduce risk and provide greater stability.
You can learn more about managing investment risk in our article:
👉 How to Know If You’re Taking on Too Much Investment Risk
Equity compensation is an important part of your pay—but it’s also conditional. Unvested RSUs or stock options may not vest if you leave the company, or if the share price falls below your exercise price.
If a large portion of your future financial security hinges on unvested equity, your financial picture may be more fragile than you realize. That’s why it's essential to have a plan that includes:
For more on this, see our guide:
👉 How to Make the Most of Equity Compensation
This question is about both numbers and emotions. If your company’s stock lost value tomorrow, how would it affect your ability to:
One of the most dangerous positions to be in is genuinely not knowing the answer to the first question. Has your advisor run a financial independence analysis for you lately? Tools like that can help assess whether a lack of diversification is putting you at unnecessary risk.
Generally, though, if a relatively small decline would cause major stress, you’re probably overexposed to a single investment. Selling even a portion of your shares could provide more peace of mind and long-term flexibility.
One of the biggest roadblocks to selling company shares is the tax implications—and understandably so. Capital gains tax rates can be significant, especially if you’ve held the shares for years, and it can be hard to eat that cost.
But here’s the thing: taxes should never be the sole reason you hold a risky investment.
Smart tax strategies might include:
If taxes are holding you back, we should talk. With many CPA’s on our team and an internal Tax Advisory group, we help clients zoom out so they stop putting off good long-term decisions by focusing on short-term impacts.
This is worth repeating: Selling company stock is not disloyal. It’s a smart way to protect your hard work, reduce stress, and pursue a more balanced financial future.
In fact, we’ve found that many clients feel a renewed sense of clarity and confidence after diversifying. They’re no longer emotionally tied to daily market movements and can focus on long-term wealth building.
You can still celebrate your company’s wins—even if some of your wealth is now parked elsewhere.
Owning company stock can be a powerful part of your wealth—but it shouldn't be the whole story.
By asking the right questions, understanding your risks, and being intentional with your financial decisions, you can turn stock-based compensation into a strategic asset—not a source of stress.
And remember: this article is for informational purposes only. Every investor’s situation is different. If you're unsure about the best course of action, it's wise to work with a financial advisor who can help you evaluate your unique position and develop a personalized plan.
At Plancorp, we help professionals like you take control of their company shares through personalized, tax-aware wealth management strategies. Whether you’re early in your career or preparing for retirement, we’re here to help you get the most from your hard-earned equity—without the guesswork.
Book your private strategy session today to see what’s possible.