Title: $500,000 Missed Opportunity Tagline: $500,000 Missed Opportunity: Calculating EVA to Optimize RSU Strategy Before Retirement Problem: John, a 55-year-old CTO with $3.2M in vested RSUs at TechForward Inc., is nearing retirement. He assumes his RSUs are a significant asset, but hasn't critically assessed if TechForward is generating sufficient returns to justify holding the stock versus diversifying into other investments that align better with his risk profile and retirement goals. TechForward's WACC is 10%, and their after-tax operating profit attributable to John's RSU allocation is $200,000 annually. Is John truly maximizing his wealth? Solution: By using the Economic Value Added (EVA) calculator, John can quantify whether TechForward's performance is exceeding its cost of capital. The calculator will provide a clear picture of the true economic profit generated by his RSU allocation, factoring in the company's weighted average cost of capital. This informed decision-making process allows John to determine if holding onto TechForward stock is the most efficient strategy for his retirement portfolio. ROI: By calculating an EVA of -$120,000 (After-tax operating profit of $200,000 - (Capital Employed of $3.2M * WACC of 10%)), John realizes he's essentially losing $120,000 in potential value each year by remaining heavily invested in TechForward. This realization prompts him to diversify $1.6M of his holdings (50%) into a blend of low-risk bonds and dividend-paying stocks, generating an estimated annual return of 6%. This translates to $96,000 in annual income, significantly improving his retirement prospects and offsetting a substantial portion of the "lost" EVA. He saves potentially $500,000 over a 5 year period of not diversifying and only holding TechForward stock. Description: Unlocking hidden value in your equity compensation is crucial as you approach retirement. This calculator helps you determine if your stock options are truly creating economic value. Category: Lead Gen