Executive Compensation 101: turning “I’ll figure it out later” into a solid financial plan
It’s easy to put off investing. You might not know where to start. You’re afraid of making a mistake. Maybe you’re too busy with work to give your personal finances the time and attention they deserve. You’re human. It’s normal to experience these things. Life happens.
You can get ahead of the “I wish I’d known that” moments by teaming up with a financial planner. They can help you avoid mistakes that could cost you more than the planning fee ever will. Read on to learn what that looks like.
tl;dr
You didn’t work this hard just to let taxes and confusion eat your paycheck. A financial planner can help you dodge the “If only I’d known” moments and put your executive pay to work. They’ll provide you with clarity on what you have and coordinate your money team to avoid mistakes that could seriously cost you.
Before you say “I’ll figure it out later…”
First things first: don’t tell yourself you need to be making more money to work with a financial planner. If you’re in management or on your way there, there’s a good chance you’ve already got valuable stuff in your compensation package.
If you keep meaning to dig into it but don’t have the time or brain space to do it, you’re not alone. A trail of old 401(k)s or pensions gathering dust from job hopping is also common. Life gets busy and figuring out your executive pay isn’t always the squeakiest wheel. It’s understandable.
But we’re here to tell you that starting, even if it’s just a little, is a powerful step toward the future you want. You don’t have to have it all figured out; you just have to begin.
Clarity around equity compensation: from overwhelming to under control
For many first-time executives, equity compensation in the form of RSUs and stock options feels like you’ve finally made it. But they’re easy to get wrong if you don’t understand the fine print. They require strategic planning around taxes, timing, and risk. Without clarity around these things, you could easily:
Miss opportunities, like holding a majority of your net worth in company stocks. If the company stock tanks, so does a big chunk of your net worth.
Overpay in taxes, like selling stock (and getting taxed on it) and then donating cash to charity. You miss the double tax benefit of donating stock itself. If you donate stock directly, you aren’t hit with taxes and can claim a charitable deduction.
Using your stock options to buy company shares (aka exercising) at suboptimal times, like during a high-income earning year. Vesting RSUs shares without understanding the tax and concentration risk can push you into a higher tax bracket, which means you pay more in taxes. Good for Uncle Sam, but you, not so much.
They require strategic planning around taxes, timing, and risk—areas where many new executives make costly missteps. Here’s what those mistakes look like and how to avoid them.
Best practices to get ahead
RSUs, ISOs, NQSOs, AMT—equity compensation comes with its own language, and it’s easy to get lost in the acronyms. With a little strategy, though, you can turn that confusion into actual wealth. Here’s how to make your money work smarter, not harder:
Make friends with your vesting schedule. Create a simple calendar (Google Sheets totally works!) with your vesting dates and tax deadlines. That way, you know exactly when money’s coming in and when Uncle Sam’s gonna want his cut.
Don’t move until you model it. Before you exercise or sell anything, run the numbers with your CPA or financial planner. You wouldn’t post on LinkedIn without proofreading. The same goes for your finances. Know the tax impact before you hit “sell.”
Diversify with purpose. We love your company, but your net worth shouldn’t depend on its stock price. Start selling off a little each year and put that cash toward other investments. Future you will be so glad you didn’t keep all your eggs in one ticker symbol.
Give strategically. Maybe you’ve been thinking about donating to a cause you care about. You might be able to give appreciated stock instead of cash. Doing so means you can skip the capital gains tax and still snag the charitable deduction. Win-win.
Know the rules before you play. Every company has “blackout periods” when you can’t sell stock. Check your trading policy so you don’t accidentally break the rules and end up explaining yourself to compliance.
You’ve worked too hard to let confusion or fine print stand between you and your wealth. Your equity is part of your story now and, with the right plan, it can be one of the biggest tools for building the life you actually want. Learn the rules, make them work for you, and remember: confidence with money is built, not born.
Coordination: getting your financial team together
Executive pay intersects with many other areas, like tax strategy, estate planning, and retirement planning. Coordination means getting your financial squad (financial advisors, tax accountants, legal counsel) to work in sync. When they’re all on the same page, you avoid nasty surprises like massive tax bills, accidentally breaking insider trading rules, or throwing your long-term goals off track.
You’ve got a team at work. There’s no shame in saying, “I need help with personal finances.” Whether you’re overwhelmed by the idea of gathering financial documents and understanding the fine print or don’t even know where your accounts are anymore, a good advisor has seen it all and can help you sort through everything without judgment.
Your finances deserve the same kind of energy you give your career
Stock options, RSUs, bonuses. Reaching this stage is an accomplishment—it’s exciting, but it can also feel complex. Managing complex compensation structures is a job unto itself. Partnering with a financial professional could help you stay ahead of things that could set you back way more than any planning fee ever could.
Get your money ducks in a row
You’ve already done the hard part: earning your compensation. Now the challenge is keeping it, growing it, and protecting it. CURO can help. Let’s talk!
This material is intended for informational/educational purposes only and should not be construed as investment, tax, or legal advice. CURO Wealth Management does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.