Adam Advisory · Equity Compensation Tools
Concentration Risk Calculator
See how much of your wealth rides on a single company — the one that also signs your paycheck — and what a bad year for that stock would do to your whole portfolio.
Please note: This tool is for general educational purposes only. It shows simple ratios and
hypothetical stress scenarios based on the figures you enter. Any reference range or threshold shown is a
general rule of thumb, not a personalized recommendation, and does not account for your risk tolerance,
time horizon, liquidity needs, tax situation, or the cost of selling. It is not financial, tax, investment,
or legal advice or a recommendation to buy, sell, or hold any security. See our
full disclosures for important information. When you're ready to look at your
situation in detail,
let's talk.
Your concentration
Two views: what you could act on today, and where you're headed if nothing changes
Current concentration
Vested employer stock as a share of everything you could sell today
Total economic exposure
Vested + unvested employer stock as a share of your total, since unvested shares carry the same stock-price risk once they vest
If your employer's stock has a bad year
A concentrated position moves your whole portfolio — here's how much
| If employer stock falls… | Vested value left | Total portfolio value | Whole-portfolio drop |
|---|
| −20% | | | |
| −40% | | | |
| −60% | | | |
Stress scenarios apply the drop to vested employer stock only — the portion you actually hold.
Unvested shares would typically fall in value too, which would deepen the impact on your total economic exposure.
A concentrated position means more of your financial life depends on one company. It's a
common starting point for equity-comp wealth — but the same company that pays your salary, your bonus,
and possibly your RSUs is now also carrying a large share of your net worth, and all of that can move
together in a downturn. Diversifying out of concentrated positions over time is one of the most effective
ways to manage that risk. How quickly, and how much to keep, depends on your goals, timeline, and how much
of a setback you could absorb — but that's a decision worth making on purpose, not by default.
Unvested shares still count toward where you're headed. You can't sell unvested shares today,
and you'd forfeit them if you left before they vest — but once they do vest, they become the same
company stock you already hold. That's why the "total economic exposure" view above counts them: it shows
how concentrated you'll be if nothing changes, even though today's actionable concentration number
(left) doesn't include them yet.
How these numbers are calculated
Current concentration = vested employer stock ÷ (all other investable assets + vested
employer stock). It excludes unvested shares because you can't sell them, and excludes your home because home
equity is a different kind of asset with different risks (this mirrors how our other tools treat a primary
residence). Total economic exposure = (vested + unvested employer stock) ÷ (all other
investable assets + vested + unvested), a forward-looking view of where your mix is headed if you keep and
vest what you have. The reference bands differ between the two views: current concentration uses the widely
cited single-stock guideline of under 10% lower, 10–20% moderate, over 20% higher; total economic
exposure uses a looser under 15% / 15–30% / over 30% band, since unvested shares aren't yet actionable
and naturally make up a larger share of net worth earlier in a vesting schedule — using the same tight
band for both would flag most early-career equity comp holders as "Higher" by default. Both sets of bands are
shown for context only; they are not a recommended target for you and do not reflect your personal
circumstances. Stress scenarios reduce the vested
employer-stock value by the stated percentage, hold all other assets flat, and recompute the total; the
"whole-portfolio drop" is the resulting decline in total value (all other assets + vested employer stock).
The tool does not model taxes on selling, transaction costs, correlation between your employer's stock and the
rest of your portfolio, or any change in the value of unvested shares.
This calculator is provided by Adam Advisory, LLC (“Adam Advisory”), an investment adviser
registered with the State of Arizona, for educational and informational purposes only. It is a simplified,
hypothetical illustration and does not constitute tax, legal, accounting, or investment advice, nor a
recommendation to buy, sell, or hold any security or to adopt any investment strategy. The ratios and stress
scenarios shown are based solely on the figures you enter and do not account for your risk tolerance, time
horizon, liquidity needs, tax situation, the cost of selling appreciated positions, or the correlation between
your holdings. Any reference range shown is a general rule of thumb, not a personalized target. Hypothetical
results have inherent limitations and no representation is made that any outcome shown will be achieved.
Before making decisions about a concentrated position or your equity compensation, consult a qualified
professional or contact Adam Advisory to discuss your specific circumstances. Registration as an investment
adviser does not imply a certain level of skill or training. Additional information about Adam Advisory,
including its Form ADV Part 2A, is available at
adamadvisoryfp.com/disclosures.
