How to Turn Your 10b5-1 Plan Into a Personal Wealth Engine

If you’re a senior executive, founder, or key employee at a public company, chances are you’re sitting on a significant equity position, and with it, a fair amount of risk.

You’re likely navigating trading blackouts, board meetings, quarterly earnings calls, M&A discussions, or all of the above. You may have a 10b5-1 plan in place (or know you should), but haven’t fully tapped its potential as a strategic tool for long-term wealth planning.

Most 10b5-1 plans are treated as a compliance box to check. But when designed thoughtfully, your trading plan can do far more than just avoid regulatory trouble, it can actively optimize your tax position, reduce equity risk, create liquidity, and reinforce governance best practices.

Here’s how.

The Public Company Insider’s Dilemma

As someone with substantial equity exposure, you’re likely facing some combination of these challenges:

• You want to diversify out of your concentrated position, but you’re restricted by blackout windows or the optics of selling too close to company news.

• You need cash flow to pay taxes, fund lifestyle expenses, or meet philanthropic goals, but can’t predict exactly when you’ll be able to trade.

• You’re wary of legal or reputational exposure. Even the appearance of improper timing could cause issues with investors, regulators, or internal counsel.

• You value structure, process, and documentation. You want a plan you can explain to yourself, your board, or your future self years from now.

That’s where a strategic 10b5-1 plan comes in.

What a 10b5-1 Plan Should Be

A well-crafted 10b5-1 plan doesn’t just protect you from insider trading liability. It becomes a personalized liquidity roadmap, aligning your trading cadence with your cash flow needs, diversification goals, and broader wealth strategy.

At Compound, I work with clients to build plans that are flexible, tax-aware, and behavioral-proof. We treat your 10b5-1 not as a one-and-done form, but as the foundation of a dynamic, multi-year strategy.

Here’s what that looks like in practice.

Value Add: Turning a 10b5-1 Plan Into a Wealth Strategy

1. Timing for Tax Efficiency

We integrate tax alpha into your sale cadence:

• Tax-loss harvesting: Use down-market periods to schedule small sales that create capital loss carryforwards.

• Tax-lot targeting: Choose which lots to sell: high-cost first for loss harvesting, or low-cost first for gain acceleration.

• Calendar control: Shift gains between tax years by accelerating or deferring trades inside your plan.

2. Hedging Around Equity Risk

Even if you can’t sell more shares right away, we can manage risk around what you hold:

• Covered calls: After a 10b5-1 sale, overlay call options on remaining shares to generate income.

• Protective puts / collars: Use options to limit downside in between sale windows.

• Dynamic triggers: Align options activity with the same price or date logic in your 10b5-1 plan.

3. Diversification and Reinvestment

We help you reinvest proceeds with intention:

• Tranche sizing: Front-load sales or stagger them to manage tax exposure and cash flow predictability.

• Reinvestment buckets: Direct proceeds to pre-defined accounts: lifestyle, growth, liquidity reserve.

• Cross-asset triggers: Sell equity when your fixed income or cash reserve dips below target thresholds.

4. Liquidity Planning for Known Needs

We design the plan to meet your life, not the other way around:

• Tax reserve sales: Schedule small trades to build liquidity ahead of estimated payments or AMT hits.

• Milestone-based tranches: Tie sales to known future needs (down payment, tuition, charitable pledge).

• Emergency top-ups: Trigger sales if cash falls below a defined level, protecting other assets from forced liquidation

5. Behavioral Coaching and Governance

Structure helps reduce the burden of decision-making:

• Pre-approved exceptions: Set up documented, board-approved carve-outs for unplanned liquidity needs.

• Commitment to reinvestment: Automatically direct a portion of sales to a diversified portfolio to ensure long-term alignment.

• No-touch discipline: Eliminate the temptation to override your plan during market volatility or headline risk.

6. Philanthropic Integration

10b5-1 plans can be powerful charitable tools:

• DAF contributions: Sync scheduled sales with donor-advised fund top-ups for seamless giving.

• CRT funding: Trigger sales when charitable remainder trusts need to meet payout obligations.

• Foundation planning: Time sales to match private foundation grant cycles.

7. Event-Driven Planning

Sophistication matters around key corporate events:

• IPO lock-up expirations: Pre-plan sales tied to unlock dates to reduce concentration risk post-IPO.

• M&A milestones: Structure tranches to follow deal closures or earn-outs.

• Proxy-season buffers: Build in compliance buffers around board meetings or shareholder communications.

Why It Matters

A thoughtful 10b5-1 plan delivers peace of mind, not just that you’re protected, but that you’re optimized. It reinforces your reputation as a governance-minded leader, helps you sleep better at night knowing your tax and liquidity needs are covered, and keeps you diversified, disciplined, and intentional.

It also becomes a powerful narrative tool. When investors, regulators, or internal stakeholders ask about your equity sales, you can point to a plan that is process-driven, pre-documented, and tied to long-term goals, not short-term emotions.

Final Thoughts: You Deserve More Than a Template

If your current 10b5-1 plan was created by someone who doesn’t understand your broader wealth picture, or worse, just handed you a form to sign, it might be time to revisit the conversation.

At Compound, I help clients turn their compliance obligations into customized wealth strategies that serve their real lives, not just check a legal box.

If you’re navigating concentrated equity risk, blackout periods, or uncertain liquidity planning, let’s talk about how your 10b5-1 plan can do more.

👉 Learn more: demo.compoundplanning.com

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