By Adam Weingartner, CFA® | Partner, Bluestone Wealth Partners
As your career progresses, compensation tends to get more complicated.
A salary becomes a salary plus a bonus. Stock grants enter the picture. Your 401(k) offers more options. Deferred compensation becomes available. Trading restrictions may affect what you can do with company stock.
At some point, the question is no longer simply, “Am I saving enough?”
It becomes, “Are all of these decisions actually working together?”
I work with corporate executives and high-net-worth families who routinely make complex decisions in their professional lives. Yet when it comes to their own finances, opportunities can still be missed simply because no one is looking across the entire picture - compensation, investments, taxes, benefits, estate planning and long-term goals.
That is where thoughtful executive compensation planning can make a meaningful difference.
Your Compensation Is More Than Your Salary
One of the first things I want to understand when working with an executive is exactly how they are compensated.
Equity compensation is a good example. Restricted stock, performance awards, stock options and other forms of company equity can each have different tax implications, vesting schedules and risks.
Sometimes a strategy that looks more attractive from a tax perspective requires holding company stock longer. That introduces another important question:
How much additional investment risk are you taking to achieve that tax benefit?
For an executive whose salary, bonus, future equity compensation and personal investment portfolio may all be tied to the same company, concentration risk can build quickly.
The most tax-efficient decision is not automatically the best financial decision.
Taxes matter, but they are only one part of the equation. Executive compensation planning requires looking at the tax consequences, investment risk, liquidity needs and long-term financial plan together.
Are You Taking Full Advantage of Your 401(k)?
Many executives tell me, “I already max out my 401(k).”
My next question is usually:
What else does your plan allow?
For 2026, the employee 401(k) elective-deferral limit is $24,500. Certain employer plans, however, also permit additional after-tax employee contributions that may create an opportunity commonly referred to as a mega backdoor Roth.
If your 401(k) permits the necessary after-tax contributions and either an in-plan Roth conversion or an eligible Roth rollover, you may be able to move substantially more money into a tax-advantaged Roth structure.
For 2026, the overall defined-contribution limit is generally $72,000 before applicable catch-up contributions. That limit includes employee elective deferrals, employer contributions and additional after-tax employee contributions.
One of the things we regularly uncover when reviewing an executive’s benefits package is that they are already maximizing the traditional 401(k) contribution but have never explored whether their plan permits additional after-tax contributions.
Not every company offers the features necessary for a mega backdoor Roth 401(k) strategy, which is exactly why understanding the details of your plan matters.
It is also important to distinguish a Roth 401(k) from a Roth IRA. High income can prevent someone from making a direct Roth IRA contribution, while designated Roth 401(k) contributions are not subject to those same income limitations.
Over the course of a career, seemingly small differences in retirement-plan rules can create significant differences in after-tax wealth.
Deferred Compensation Requires Looking Ahead
Nonqualified deferred compensation can be valuable for executives in high tax brackets, but reducing taxable income today is only part of the analysis.
You also need to understand when and how that income will eventually come back to you.
Depending on the plan and the distribution election you make, deferred compensation could be paid during a year when you already have substantial taxable income. A decision that looked attractive from a tax perspective years earlier can produce a very different result if the timing is not coordinated with retirement, other income sources and your broader financial strategy.
We prefer to project forward before making the election.
What could the deferred compensation balance grow to? When do you expect to leave the company? What might your taxable income look like at that point? Will distributions overlap with other significant sources of income? How does the decision fit with your retirement strategy?
For some executives, deferring more income makes a great deal of sense. For others, the future distribution schedule can create tax consequences that deserve more consideration.
Tax deferral is a tool. Using it well requires a plan.
Company Stock Can Require Its Own Strategy
Executives with significant company stock face another challenge: they may not always be able to sell when they want to.
Trading windows, insider-trading policies and possession of material nonpublic information can all affect an executive’s ability to transact in company stock. That can make diversification more difficult, particularly as the position grows.
One tool certain executives may consider with their legal, tax and financial professionals is a Rule 10b5-1 trading plan. When properly established, a 10b5-1 plan can provide predetermined instructions for future stock transactions, subject to SEC requirements and the company’s own policies.
I have worked with C-suite executives who had accumulated millions of dollars in company stock yet were unfamiliar with this option.
That is a good example of why executive financial planning is about more than choosing investments. Sometimes the greatest value comes from knowing which questions to ask before circumstances force you to make the decision.
Why October Is an Important Month for Executive Compensation Planning
There are a couple of times each year when we tend to have particularly important planning conversations with corporate executives.
March and April often bring bonuses, stock grants and decisions around investing, selling, taxes and liquidity.
Then comes October and benefits enrollment season.
It is easy to click through your elections and simply choose what you selected last year. But compensation changes. Tax circumstances change. Families change. Financial goals change.
Benefits enrollment is an opportunity to take another look at questions such as:
How much should you contribute to your 401(k)?
Does your plan offer a mega backdoor Roth opportunity?
How much should you contribute to deferred compensation?
Are you using all of the retirement-plan opportunities available to you?
Does your life and disability insurance coverage still fit your needs?
Which health plan makes the most sense for your circumstances?
Have changes in your income, family or long-term goals altered any of these decisions?
Your benefits package is part of your compensation, and your compensation is part of your financial plan.
It deserves more consideration than simply repeating last year’s elections.
What a Personal CFO Actually Does
At Bluestone Wealth Partners, we often describe our role as serving as a personal CFO for our clients.
A successful executive may already have a CPA, estate-planning attorney, corporate benefits team, insurance professionals, mortgage lender and other advisors. Each may be excellent within his or her specialty.
The challenge is that no single professional is necessarily responsible for making sure every piece works together.
That is where we come in.
We look at investment decisions alongside company stock and executive benefits. We coordinate with a client’s CPA when tax planning affects an investment decision. We work with estate-planning attorneys when wealth-transfer decisions intersect with the portfolio. We review retirement plans, deferred compensation and insurance benefits and help identify the questions worth asking.
There is a meaningful difference between understanding some of these strategies and executing a complete and well-thought plan.
A financial plan can be created at a moment in time. Planning continues as your career, compensation, family, wealth and goals evolve.
In my experience, that ongoing coordination is where some of the most valuable work happens.
Start Before Another Benefits Window Passes
One of the most common comments I hear after presenting an executive with a comprehensive financial plan is:
“I wish I had done this 10 years ago.”
You cannot go back 10 years. But you can make sure another year does not pass without understanding the opportunities available to you.
If your company’s benefits enrollment period is approaching this October, now is a good time to review your 401(k), mega backdoor Roth opportunities, deferred compensation elections, insurance coverage, company stock strategy and broader financial plan before simply repeating last year’s choices.
And if you are navigating stock compensation, approaching retirement or simply wondering whether the different pieces of your financial life are working together as effectively as they could be, that conversation does not need to wait until open enrollment.
To discuss your executive compensation and broader financial strategy, contact me directly at adam.weingartner@bluestonewp.com.
