You Own Too Much of One Company. Here's the System That Fixes It — Without Guessing the Top.
Last week we made an uncomfortable point: a lot of successful people who think they're diversified aren't. You can own eleven index funds and still have 40% of your net worth riding on one ticker — the one printed on your paycheck, or the one on the sign outside your building.
That post diagnosed the problem. This one is about the cure.
Because here's what actually happens once an executive or a founder admits they're over-concentrated. They agree, in principle, that they should trim the position. And then they don't. Not out of laziness — out of a very human tug-of-war that plays out every quarter:
"It's up 60% this year. Selling now would be dumb."
"It's down 15% — I'm not selling into weakness."
"Earnings are in three weeks. I'll wait and see."
"My whole team can see my trades. What does it signal if I start selling?"
Every one of those sentences feels responsible in the moment. Together, over years, they are how a 20% position quietly becomes a 55% position — and how a fortune that took a career to build ends up hostage to a single company's next bad quarter.
The fix isn't more conviction. It's a system that takes the decision out of your hands.
Why willpower is the wrong tool for this job
You are, by every measure, good at making decisions. It's most of why you're in this position in the first place. So it's worth being honest about why this particular decision defeats so many capable people.
Your company stock isn't just an asset to you. It's identity, loyalty, inside knowledge, and — if you're still employed or still running the place — the thing your income depends on too. That's a potent cocktail, and it reliably produces two errors. You overestimate how much you know about where the stock is going (you don't have an edge; you have exposure). And you treat every sale as a market call you might get wrong, when it's really a risk-management decision you can't afford to skip.
The behavioral trap is that there is never a clean moment to sell. When the stock is up, selling feels like leaving money on the table. When it's down, selling feels like panicking. When it's flat, there's always a catalyst around the corner worth waiting for. A decision that has no good time to be made is a decision that never gets made — unless you decide it in advance.
That's the whole idea behind a rules-based sell-down: you make the hard call once, in a calm moment, in writing. After that, the plan makes the call for you.
The four decisions to make once — and never again
A concentrated-position plan doesn't need to be complicated. It needs to be decided. Four questions do most of the work.
1. What's your ceiling? Pick the maximum percentage of your investable net worth you're willing to have in any single stock. For most executives and owners we work with, that number lands somewhere between 10% and 20%. There's no universal right answer — but there is a right process: choose the number when you're not staring at the price, write it down, and treat anything above it as a position to be reduced, not defended.
2. How fast do you get there? If you're sitting at 45% and your ceiling is 15%, you don't have to close that gap tomorrow. A schedule — trimming a set percentage each quarter over eight or twelve quarters — turns a terrifying all-at-once decision into a series of small, boring ones. Boring is the goal. Boring is what you can actually stick to.
3. What happens to new shares? For executives, this is the part people miss. Every vest, every option exercise, every ESPP purchase re-concentrates you. A real plan addresses the inflow, not just the existing pile — for example, a default rule that newly vested shares are sold on a set cadence rather than added to the mountain. Withholding is not a plan; a written sell schedule is.
4. Where does the money go? Selling is only half the decision. The proceeds need a predetermined destination — your diversified portfolio, tax-advantaged accounts, a charitable vehicle, debt paydown — so the cash doesn't sit around waiting for you to make another discretionary call you'll also postpone.
Answer those four once, and you've converted an emotional, recurring, high-stakes decision into an automatic process. That is the entire point.
If you're a public-company insider: build the plan so it can run on autopilot
For executives at public companies, there's a tool built precisely for this: a written trading plan that lets you pre-schedule sales of company stock in advance, while you're not in possession of material non-public information. Set it up during an open window, define the amounts and timing ahead of time, and the sales execute on schedule regardless of what you know or how you feel later.
Two things it buys you. First, it answers the "what will people think if I sell?" worry — the sales are pre-committed and impersonal, not a reaction to this week's news. Second, and more importantly, it enforces the discipline for you. The plan doesn't get nervous before earnings. It doesn't fall in love with a rally. It just does what you told it to do when you were thinking clearly.
The rules around these plans — cooling-off periods, timing, documentation — have real teeth, so this is a conversation to have with your advisor and counsel, not something to improvise. But the underlying principle is one every over-concentrated person can borrow: decide in advance, execute on a schedule, remove yourself from the moment.
If you're a business owner: your ticker is the whole company
If you own your business, you may be reading this thinking it doesn't apply to you. It applies more than to anyone.
An executive with 45% in company stock has a concentration problem. A founder with 90% of their net worth locked inside a private, illiquid company they also depend on for income has the same problem in a far more extreme form — and usually no vesting schedule quietly handing them shares to sell along the way. The concentration just sits there, growing, until a single event — an offer, a health scare, a market shift, a partner dispute — forces the issue all at once.
You can't run a quarterly sell-down of a private company. But you can apply the same logic around it. That means deliberately building wealth outside the business every single year, so it isn't the only thing you own — treating "pay myself and diversify" as a fixed expense, not the leftover after everything else. It means knowing what the business is actually worth and how a sale would be taxed long before you're at the table, so a liquidity event is a plan you execute rather than a surprise you react to. The owners who sell without regret are the ones who started diversifying years before the sale — not the ones who waited for the wire to hit and then wondered what to do with it.
Same disease, same cure: don't let one asset — however good, however much you love it — decide your family's entire financial future.
The uncomfortable freedom of a rule
There's a reason we keep coming back to rules over feelings. A rule you set in a clear moment protects you from the version of yourself that shows up when the stock is ripping, or crashing, or when earnings are next week. It's not that your judgment is bad. It's that your judgment is compromised on this one holding in a way it isn't anywhere else — and the smartest move is to admit that and build around it.
The goal was never to sell at the perfect price. Nobody does that, and chasing it is exactly what keeps people stuck. The goal is to still be standing, diversified, and in control no matter what your one big position does next.
Decide the rules once. Then let them do the hard part.
Want to see what a rules-based plan for your equity compensation could look like? Our Exec Comp Optimizer walks you through the trade-offs on your concentrated position, your vesting, and your withholding in a few minutes: https://forecastcapitalmanagement.kit.com/exec-comp-opt
Forecast Capital Management works with executives and business owners on exactly these decisions. This article is for educational purposes and is not individualized investment, tax, or legal advice.
