The Most Painful Stock Award Mistake for Corporate Executives in Minnesota?

If you’re a corporate executive in Minnesota, a large portion of your wealth might be tied to one company—your employer.

And for a while, that works really well. Stock awards accumulate. Your income is strong. Your net worth grows year after year. It feels like the system is working exactly the way it’s supposed to. But there’s a risk that quietly builds in the background.

It’s called concentration risk.

In my work with executives at Target, 3M, Ecolab, General Mills, Hormel, and other major Minnesota employers, this is the single most common issue I see, and the one with the biggest potential consequences.

Here’s the mistake, put simply: It’s not owning company stock. It’s not having a plan for it.

Why Concentration Becomes a Real Problem

Most executives don’t realize how exposed they are to their employer until we actually sit down and map it out. The exposure tends to show up in three places at the same time:

Your income depends on the company.
Your career depends on the company.
Your portfolio becomes heavily tied to the same company.

That’s not diversification. That’s double—or triple—exposure to a single outcome.

If the company does well, everything works. If the company hits a rough stretch, three parts of your financial life can feel the impact at once.

“But These Are Great Companies…”

Yes, they are. Many of the companies we’re talking about have been anchors of the Minnesota economy for decades. Strong balance sheets. Recognizable brands. Steady leadership.

And that’s exactly why this gets overlooked. Because even great companies experience:

30%–50% drawdowns
Multi-year recoveries
Unexpected events (litigation, tariffs, leadership changes, industry shifts)

Here’s what that has looked like in real terms in recent years:

Target: ~$233 → ~$106 (~54% decline)
3M: ~$259 → ~$108 (~58% decline)
Ecolab: ~$238 → ~$150 (~37% decline)
General Mills / Hormel: ~50%+ declines

Now translate that into dollars.

👉 A $1M concentrated position down 50% = approximately $500,000 decline.

That’s not theoretical. That’s real balance sheet impact. And for an executive planning to retire within the next several years, a drop like that can push timelines out, force changes to lifestyle, or derail specific goals entirely.

The Tax Planning Problem

Most executives I meet don’t just have a concentration problem. They have a tax planning problem tied to it.

The pattern usually looks something like this:

Holding shares to “avoid taxes”
No multi-year strategy for selling or diversifying
Large gains eventually hitting in a single year. And it might be the year they can least afford it

The result:

Higher tax bills
Less flexibility
Fewer options later

When taxes drive the investment decision instead of the other way around, concentration tends to grow, not shrink. (I wrote more about this dynamic in our post on common RSU mistakes if you want to dig deeper.)

So How Does This Happen?

A few reasons I see over and over:

Loyalty to the company. Many executives genuinely believe in what they’re building, and reducing a position can feel like a vote of no confidence.
Fear of missing upside. If the stock keeps climbing after you sell, that’s a hard feeling to shake.
Complexity around taxes and timing. Different grants, vesting schedules, and tax treatments can make the decision feel overwhelming.
Lack of coordinated advice. The CPA, the company’s stock plan provider, and the financial advisor often aren’t talking to each other.

So the default becomes… do nothing. And “do nothing” quietly lets concentration grow.

Why Having a Plan is a Better Approach

This isn’t about “selling everything.” That’s rarely the right move, and it’s not what we recommend.

It’s about having a plan. A good plan helps you:

Understand how concentrated you actually are (most people underestimate it)
Gradually diversify in a tax-aware way
Align decisions with your vesting and grant schedules
Reduce downside risk without overreacting to headlines
Tie every decision back to your long-term goals

Done well, this creates more certainty about your future—not less.

The Mindset Shift

At some point in an executive’s career, the question changes.

Early on, it’s: “What could this stock become?”

Later, it becomes: “How do I protect what I’ve already built?”

Both are valid questions. But they lead to very different strategies. One of the most important things I help clients work through is recognizing when that shift has happened—or when it should.

Final Thought

I believe one of the most painful stock award mistake I have seen over the last 23 years isn’t picking the wrong stock; it’s not having a strategy or plan for your company stock.

If a significant portion of your net worth is tied to your company stock, it may be worth taking a closer look at your exposure—before the market or a life event forces that conversation on your timeline.

At One Life Financial Group, I work with corporate executives to turn equity compensation into a coordinated, tax-aware financial strategy that supports the life they want to live.

If that’s something you’ve been thinking about, I’d love to have a conversation.

Let's Talk

A disclaimer for you: I’m not an accountant. I don’t give tax advice. At One Life Financial Group, we talk a lot about tax minimization strategies, but please speak with your accountant before acting on any new strategy. Stock price examples above reflect historical drawdowns and are for illustrative purposes only—they are not a recommendation to buy or sell any specific security. If you’re unsure how to minimize your tax bill this year, or if you’re looking to create a plan to secure your future and need help getting started, we’d love to connect with you.

Sources

Stock price data and historical ranges were obtained from publicly available market data sources, including:

Data reflects approximate peak and trough pricing based on closing prices and is intended for general illustration purposes only.

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