Fiduciary Trust Company of Canada Acquisition: What Happens to Your Stock Options & RSUs

Question: What happens to my Fiduciary Trust Company of Canada stock options in the Edward Jones Canada acquisition?

Answer: Stock option treatment depends on your grant agreements and deal terms. Review your stock option agreement for "change of control" provisions. Common outcomes: (1) Cash-out—options bought out at spread value, taxable as employment income; (2) Acceleration—unvested options vest immediately, typically 90 days to exercise; (3) Assumption—options convert to Edward Jones Canada options at adjusted ratio with new vesting; (4) Rollover—options continue with modified terms. Critical: vested options not exercised within the post-close window (often 90 days) are forfeited. Mark this deadline in your calendar.

Question: How are Fiduciary Trust Company of Canada RSUs treated in the acquisition?

Answer: RSUs (Restricted Stock Units) typically have clearer treatment than options since there's no exercise decision. Common outcomes: (1) Full acceleration—all RSUs vest at close, you receive deal consideration; (2) Conversion—RSUs convert to Edward Jones Canada RSUs at exchange ratio, vesting continues; (3) Partial cash-out—vested RSUs paid out, unvested convert or continue. Critical tax consideration: accelerated vesting means accelerated taxation. If all your RSUs vest simultaneously, you could face a significantly higher tax rate than with gradual vesting. Estimate your tax liability and ensure you have liquidity to pay—you'll owe tax even if you can't immediately sell the shares.

Question: Are retention bonuses common in financial services acquisitions like this?

Answer: Retention bonuses in financial services are less common than in some industries, but may be offered to key personnel. Edward Jones Canada may offer retention arrangements to: (1) Employees with critical operational knowledge; (2) Client-facing staff with key relationships; (3) Anyone whose departure would significantly impact the transition. If you're not offered a formal retention package, consider negotiating one if you have leverage—specialized knowledge, client relationships, or skills that would be difficult to replace. Even without a package, understanding your severance rights under Ontario employment standards provides a baseline.

Question: How do I calculate the tax on my Fiduciary Trust Company of Canada equity compensation?

Answer: Tax treatment differs by equity type. Stock options: taxed on the "spread" (value at exercise minus exercise price) as employment income when exercised. The stock option deduction may reduce the effective rate to approximately capital gains rates if certain conditions are met. RSUs: the full value at vesting is taxed as employment income—no special deduction available. For both types, your employer will withhold taxes, but withholding (typically 30-50% for large amounts) may not cover your full liability if the equity income pushes you into higher tax brackets. For significant equity, expect to set aside 40-50% for taxes. Pay attention to installment requirements if your equity creates a large tax liability.

Question: What if I'm laid off after the Fiduciary Trust Company of Canada acquisition?

Answer: Post-acquisition layoffs are common as acquirers eliminate redundant roles and achieve synergies. Your protections: (1) Ontario employment standards minimum severance (1 week per year, max 8 weeks) plus termination pay; (2) Common law severance—typically higher, based on age, tenure, role, and ability to find similar work; (3) Any enhanced severance in a retention agreement; (4) Stock options—most plans require exercise within 90 days of termination for vested options. If terminated, don't sign a release immediately—have an employment lawyer review and potentially negotiate better terms. Your equity agreements' post-termination provisions are critical: know your exercise windows before you need them.

Question: When should I make financial decisions about my Fiduciary Trust Company of Canada equity?

Answer: Timing matters for both taxes and certainty. Key milestones: (1) Now—review all equity agreements to understand treatment and deadlines; (2) Before close—decide whether to exercise vested options (if applicable) before or after close based on tax implications; (3) At close—note all post-close deadlines for exercise windows, elections, etc.; (4) 90 days post-close—typical deadline for exercising vested options if employed; (5) Shorter if terminated—post-termination windows are often just 30-90 days. Since this deal is announced but not closed, avoid irreversible decisions until closing is certain. Deals can fail or terms can change. Work with a tax professional to optimize timing decisions—the stakes justify professional fees.