5 Strategies for Maximizing Your Compensation Package

Authored by Chris Vidler, CFP^® CIMA^®

Compensation for high income earners is rarely simple. As careers progress and responsibilities grow, pay structures often evolve far beyond base salary. Incentive programs, retirement benefits, equity awards, and tax advantaged savings opportunities can all play a meaningful role in your financial picture. Yet with added opportunity comes added complexity—each component functions differently, carries its own timing considerations, and interacts with taxes in distinct ways.

Taking a structured, informed approach to understanding your compensation can help you make decisions that align with your goals today while supporting long term financial independence. This article outlines five key strategies designed to help you navigate compensation more intentionally, with a focus on tax aware planning, equity considerations, and long term coordination.

1. Understand Every Component of Your Compensation

For high income earners, compensation is often made up of multiple interconnected elements. Gaining clarity on each piece—and understanding how they work together—is the foundation of effective planning. At a minimum, it’s helpful to break down your compensation into the following categories:

• Base Salary - Your fixed annual income forms the foundation of your cash flow planning. While straightforward, it influences bonus targets, retirement plan contributions, and employer provided benefits.
• Annual and Long Term Bonuses - Many professionals receive annual cash bonuses, while others participate in long term incentive programs that reward multi year performance. These may include cash based long term awards or equity-linked incentive structures. Understanding when bonuses are earned, how they are calculated, and whether they are guaranteed, discretionary, or performance based helps you prepare for income variability.
• Equity Awards (RSUs, Stock Options, and Performance Shares)
  Equity compensation—such as restricted stock units (RSUs), stock options, and performance shares—can be a meaningful component of total compensation. Each type features different tax treatments, vesting schedules, and potential for long term growth.
• Retirement Plan Contributions and Employer Match
  Understanding your employer’s retirement plan—such as a 401(k), 403(b), or similar program—can help you make informed savings decisions. Key areas to evaluate include:
  • Employer match and/or profit sharing formulas
  • Eligibility rules based on income levels
  • Whether after tax contributions or in plan Roth conversions are available
  • Annual contribution limits and coordination with other savings strategies
  Importantly, review whether your employer offers a year end “true up” on matching contributions. Some employers reconcile missed match amounts at year end if you hit your contribution limit early, ensuring you receive the full match you’re eligible for. If your employer does not offer a true up, you may miss out on part of the match by front loading contributions too quickly because matching contributions may be applied per pay period rather than annually.
  Reviewing your plan documents or speaking with HR can help ensure you’re making the most of your employer’s contributions.
• Health Insurance and Supplemental Benefits
  Employers may offer health coverage, dental and vision insurance, disability insurance, and supplemental life insurance packages. For high income earners, disability coverage is particularly important because it protects a higher level of income. However, many group policies have monthly benefit caps, which means higher earners can end up with far less coverage than they expect, and may be underinsured.
• Employee Stock Purchase Plans (ESPPs)
  If available, an ESPP may allow you to purchase company stock at a discount through payroll deductions. These can be valuable but should be balanced against concentration risk.
• Fringe and Lifestyle Benefits
  Your employer may offer benefits such as:
  • Parking or transit reimbursements
  • Tuition assistance or continuing education budgets
  • Technology stipends
  • Wellness incentives
  • Club memberships or professional association dues
  While smaller in dollar value, these can meaningfully influence overall compensation.

Understanding Vesting, Forfeiture, and Performance Conditions
A critical part of compensation literacy is understanding how and when equity or bonuses are earned. Key concepts include:

• Vesting schedules: When equity becomes yours (e.g., cliff vs. graded vesting)
• Performance criteria: For bonuses or performance share units (PSUs)
• Forfeiture risk: What happens to unvested awards if you change employers or do not meet performance requirements

These factors often influence career timing decisions and help you plan for liquidity needs.

Comparing Opportunities Across Employers
Two job offers with similar salaries can vary widely in long term value. Differences in retirement plan generosity, bonus potential, equity structure, vesting schedules, and fringe benefits can meaningfully impact your total compensation. Understanding each component helps you compare opportunities based on the entire package and not just the headline number.

2. Be Intentional with Equity & Long Term Incentives

Equity compensation can be one of the most meaningful components of a high income earner’s total rewards package. Taking time to understand how each type of award works, how it is earned, and how it fits into your broader financial plan can help you make informed decisions and avoid surprises.

• Know the Types of Equity You Receive
  Employers may offer one or more of the following long term incentive structures, each with its own characteristics:
  • Restricted Stock Units (RSUs): Typically vest over a set schedule and are taxed as income when shares are delivered.
  • Stock Options (Non Qualified or Incentive Stock Options): Provide the opportunity to purchase company stock at a predetermined price, with tax treatment dependent on timing and type.
  • Performance Shares or Performance Stock Units (PSUs/PSUs): Vest based on meeting certain performance metrics over a multi year period.
  Understanding which types you receive and how they are taxed is a key part of long term planning.
• Pay Close Attention to Vesting Schedules
  Vesting determines when equity becomes fully yours. Plans may use:
  • Cliff vesting: 100% vests at once after a set period.
  • Graded vesting: Portions vest over time, such as annually or quarterly.
  Knowing your vesting calendar can help you plan liquidity, anticipate tax obligations, and make better timed career decisions.
• Understand Performance Conditions and Risk
  Many long term incentive programs are tied to company performance, individual goals, or both. Because performance-based awards can vary significantly in payout, they should be viewed within the context of your broader compensation, not as guaranteed income.
• Coordinate Equity With Your Broader Plan
  Equity can create both opportunity and concentration risk. As shares vest or options are exercised, it can be helpful to:
  • Evaluate how much of your net worth is tied to a single employer
  • Consider diversification strategies
  • Assess whether upcoming vesting aligns with future cash flow needs
  A thoughtful approach can help ensure your equity supports your long term goals without taking on more risk than intended.
• Consider the Impact of Career Timing
  Equity is often forfeited if you leave before vesting, so job changes should be viewed through a long term incentive lens. Reviewing grant dates, vesting horizons, and performance periods can help you evaluate the trade offs of staying vs. moving on.

3. Use Tax Smart Deferral and Savings Opportunities

High income earners often have access to savings and deferral tools that can help manage taxable income, smooth earnings across years, and support long term planning.

• Make the Most of Workplace Retirement Plans
  Employer sponsored plans such as 401(k)s and 403(b)s allow you to contribute pre tax dollars, which can help reduce your current taxable income while building long term retirement savings. Individuals age 50 or older may benefit from additional catch up contributions.
  Under Secure Act 2.0, beginning in 2026, high income earners (those earning more than $150,000 in FICA wages in the prior year) who are 50 or older, must make their 401(k) catch up contributions as Roth contributions, not pre tax.
  This means catch up contributions for qualifying earners:
  • Will no longer reduce taxable income in the year of contribution
  • Will instead be treated as Roth, allowing for tax free withdrawals in retirement
  Even though these catch up contributions are no longer tax deductible for high income earners, Concentric generally encourages maintaining catch up savings because:
  • It preserves established savings habits
  • It increases the amount available for future retirement spending
  • It adds to the pool of tax free Roth assets, enhancing long term tax diversification
• Explore Nonqualified Deferred Compensation Plans (NQDCs)
  Many high income earners have access to Nonqualified Deferred Compensation plans which allow you to defer a portion of salary or bonuses into future years.
  These plans can be especially useful for those who exceed the IRS compensation limit for qualified plan matching, where employer contributions no longer apply.
  Deferral elections should be made thoughtfully, as payout timing may affect tax brackets, cash flow needs, and long term planning considerations.
• Consider Tax Efficient Contribution Choices
  Selecting between pre tax and Roth contributions depends on individual circumstances. Concentric emphasizes evaluating contribution types in the context of long term planning rather than applying a blanket rule for all earners.
• Coordinate Savings Decisions With Year End Planning
  Reviewing contributions ahead of year end can help ensure you’re making the most of tax advantaged savings options. This includes evaluating contributions to workplace plans, IRAs, and other available accounts.
• Align Deferral Elections With Broader Life Planning
  Deferral strategies may help coordinate income across high and low earning years. For instance, deferring compensation ahead of a planned career transition, sabbatical, or retirement may align income with long term goals.

4. Coordinate Annual Tax Planning With Your Compensation Structure

For high income earners, compensation decisions and tax decisions are deeply connected. Reviewing your tax picture annually can help you make informed choices and plan more intentionally throughout the year.

• Review How Each Part of Your Compensation Flows Into Taxable Income
  Base salary, bonuses, equity vesting, and deferred compensation distributions all affect your tax picture differently. Mapping out when income is recognized can help you anticipate higher income years, prepare for tax obligations, and align savings or deferral strategies accordingly.
• Plan Ahead for Equity Related Tax Events
  The timing of RSU vesting, stock option exercises, and performance share payouts can impact your tax liability in meaningful ways. Reviewing upcoming vesting schedules annually enables you to model potential tax outcomes, prepare cash reserves if needed, and consider diversification strategies in advance.
• Coordinate Charitable and Deduction Related Strategies Around High Income Years
  Tax intensive years—such as when large bonuses are paid or significant equity vests—may be an opportunity to evaluate charitable contributions, donor advised fund strategies, or other deduction related planning opportunities. Coordinating these decisions with your projected taxable income may help support your long term philanthropic and financial goals.
• Review Estimated Payments and Withholding After Bonuses or Equity Events
  Unexpected under withholding is a common issue for high income earners with variable compensation. Reviewing your withholding levels after bonuses or large vesting events can help ensure you’re on track with quarterly tax payments and avoid penalties or surprises at filing time.
• Revisit Deferral Elections and Savings Strategy Before Year End
  As part of your annual review, it can be helpful to assess whether your deferral elections, IRA contributions, or retirement plan strategy still align with your current and projected income. Year end planning may also reveal opportunities designed to optimize savings and adjust your strategy before deadlines approach.
• Evaluate Major Life Changes Through a Tax Lens
  Promotions, relocations, sabbaticals, and career transitions all create adjustments in cash flow and taxable income. Reviewing these events through both a compensation and tax aware lens can help ensure your elections and withholding remain aligned with your goals.

5. Help Protect What You’ve Built With Ongoing Review

As your compensation grows and evolves, so do the decisions that shape your long term financial picture. Regular check ins help ensure your planning remains aligned with your goals, adjusts to changing circumstances, and stays coordinated across all areas of your financial life.

• Revisit Plan Documents and Employer Policies Periodically
  Equity plans, bonus structures, retirement benefits, and deferred compensation programs can all change over time. Reviewing plan documents and staying updated on employer communications can help you understand how evolving rules or benefits may affect your planning decisions.
• Evaluate Risk, Concentration, and Liquidity on an Ongoing Basis
  As bonuses are paid, equity vests, or deferred compensation accumulates, your asset mix may shift. Periodic reviews can help you evaluate whether your current levels of risk, concentration, and liquidity continue to support your goals.
• Ensure Beneficiaries and Estate Elections Reflect Your Intentions
  Retirement plans, deferred compensation accounts, and equity programs often require their own beneficiary designations. Reviewing these regularly helps ensure your long term intentions remain in place and coordinated with your broader estate plan.
• Confirm Insurance and Income Protection Needs Over Time
  Higher income often means greater reliance on the ability to earn it. Reviewing disability insurance, supplemental life insurance, and other protection tools periodically helps ensure your strategy remains aligned with your responsibilities and long term objectives.
• Align Your Compensation Plan With Broader Life Changes
  Career transitions, promotions, relocations, or sabbaticals all influence compensation and cash flow needs. Reassessing your savings, deferrals, and risk exposure during these changes can help keep your plan aligned with where you are—and where you’re headed.

Closing Thoughts

Maximizing a compensation package is about understanding every component, coordinating decisions thoughtfully, and revisiting your strategy as your career progresses. Whether you’re navigating equity awards, optimizing savings opportunities, or planning for future tax obligations, a structured approach can help support your long term financial well being.

If you have questions about your compensation structure or want guidance on how to integrate it into a broader financial plan, our team is here to help.

Reach out to Concentric Wealth Partners anytime: 👉 https://www.concentricwealthpartners.com/contact-us

Neither Raymond James Financial Services nor any Raymond James Financial Advisor renders advice on tax or legal issues, these matters should be discussed with the appropriate professional.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Chris Vidler and not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

401(k) Plans: 401(k) plans are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 ½, may be subject to a 10% federal tax penalty.

Matching Contributions: Matching contributions from your employer may be subject to a vesting schedule. Please consult with your financial advisor for more information.

IRAs: Contributions to a traditional IRA may be tax-deductible depending on the taxpayer’s income, tax-filing status, and other factors. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 ½, may be subject to a 10% federal tax penalty.

Roth IRA: Like Traditional IRAs, contribution limits apply to Roth IRAs. In addition, with a Roth IRA, your allowable contribution may be reduced or eliminated if your annual income exceeds certain limits. Contributions to a Roth IRA are never tax deductible, but if certain conditions are met, distributions will be completely income tax free. Roth IRA owners must be 59 ½ or older and have held the IRA for five years before tax-free withdrawals are permitted.

Roth Conversions: Unless certain criteria are met, Roth IRA owners must be 59 ½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period. Converting a Traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion.

Donor Advised Funds: Donors are advised to consult their attorneys, accountants or tax advisors with respect to questions relating to the deductibility of various types of contributions to a Donor-Advised Fund for federal and state tax purposes.