How Corporate Executives Can Turn Equity Compensation into Long-Term Wealth

By Roxanne Martens, MS, CFP®

Equity compensation is a core part of the benefits package for many corporate executives, especially those at companies like Walmart, J.B. Hunt, Tyson Foods, Caterpillar, Meta, Salesforce, and Expedia. Whether it’s restricted stock units (RSUs), stock options, or deferred compensation, these tools can provide meaningful opportunities to build long-term personal wealth.

Maximizing these opportunities often requires more than just staying with your company or waiting for shares to vest. It takes thoughtful planning to align these benefits with your broader financial picture, particularly when it comes to taxes, investment timing and strategy, and future income needs.

In this article, we’ll review how corporate leaders can make the most of equity-based compensation as part of their long-term wealth strategy.

Restricted Stock Units

Restricted stock units are company stock grants that vest over time, usually over a number of years, provided the employee stays with the company. In contrast to stock options, employees are not required to buy RSUs; they are given the shares after the vesting requirements are complete. 

Because the value of an RSU is directly connected to the company’s stock price, regardless of an exercise price, they’re typically a less risky type of equity compensation.  

How to Use RSUs to Fund Your Long-Term Wealth Strategy

• When RSUs vest, your investment in a single company stock can become overly concentrated, increasing financial risk. Executives may benefit from strategically selling shares to diversify their portfolios across multiple asset classes.
• If the decision is made to hold some or all of the vested RSUs, any future gains may qualify for long-term capital gains tax rates if held for more than a year. For high earners in top tax brackets, this can provide significant tax advantages over ordinary income rates
• Holding vested shares may also mean receiving dividends, creating an additional layer of passive income that can supplement your broader financial plan or be reinvested for long-term compounding.

Stock Options

Stock options give employees the ability to buy company stock at a predetermined price (the grant price or exercise price) within a set period. The possibility that the company’s stock price increases above the grant price is what gives stock options their value.  

How Stock Options Fit into Executive Wealth Planning

• Stock options are tied to your company’s future growth, holding value only if the stock price exceeds the grant price. For executives, this structure can align compensation with performance outcomes that matter at the leadership level.
• When stock prices rise meaningfully above the exercise price, options can offer upside exposure beyond base salary or annual bonuses. Exercising and selling at the right time may result in a concentrated liquidity event, which brings both opportunity and tax complexity.
• Stock options can play a unique role in executive compensation, but timing, vesting schedules, and tax treatment (such as AMT with incentive stock options) are critical to consider as part of a coordinated financial plan.

Deferred Compensation Plans

Deferred compensation plans allow executives to postpone earning a portion of their pay (salary, bonus, or equity) until a later date, usually retirement. Employees may gain from tax benefits and long-term savings as a result.  

How Deferred Compensation Plays a Role in Executive Planning

• Many deferred compensation plans allow executives to choose future payout schedules whether as a lump sum, fixed term, or lifetime stream, offering flexibility to align distributions with retirement goals, cash flow needs, or tax strategy.
• Some plans include employer matching or incentive contributions. For executives who have already maxed out traditional retirement plans, this can offer an additional path to accumulate tax-deferred savings.
• By postponing income into future years, often when personal tax rates may be lower, executives may manage their current taxable income more effectively and allow deferred amounts to grow without annual tax drag.

Partner With a Professional to Navigate Complex Compensation

For corporate executives, managing RSUs, stock options, and deferred compensation plans often involves more than just monitoring vesting schedules or market prices. These benefits come with complicated tax implications, distribution decisions, and long-term planning opportunities.

At CGN Advisors, we work with professionals navigating complex equity compensation and retirement planning. As a fee-only, fiduciary firm, our role is to provide objective guidance based on your individual financial picture.

If you’d like to discuss how your compensation aligns with your broader goals, we’re available to review your options. To schedule a meeting, call our Manhattan, KS, office at (785) 340-3434 or our Rogers, AR, office at (479) 335-1034.

About Roxanne

Roxanne Martens is a CERTIFIED FINANCIAL PLANNER® professional and serves as a Lead Financial Advisor on the team at CGN Advisors, a Fee-Only, financial advisory firm based in Manhattan, Kansas. Roxanne works out of CGN’s Arkansas location, serving clients in the Rogers, Bentonville, Springdale, and Fayetteville areas. An advisor since 2020, she works with corporate executives, young professionals, and those approaching retirement by helping them utilize their growing income efficiently and facilitating strategic cash flows once their regular earned income ends. She enjoys using her skill set to educate and guide clients through life as they make financial decisions and set goals. Roxanne says, “Comprehensive financial planning and investment management takes a lot of trust from the client, and I don’t take that lightly. I genuinely want each of my clients to succeed.” Her favorite aspect of her role is connecting with clients on a personal level, providing clarity and peace, and being able to witness them realize their dreams.

Roxanne obtained her master’s degree in personal financial planning from Kansas State University and holds the CFP® designation. Prior to becoming a financial advisor, she taught in the Personal Financial Planning program at Kansas State University for seven years. As a mom with young children, most of her free time is spent with her husband, John, and two sons, Johnny and Judd. They enjoy living life outdoors—bike rides and spending time at the lake or pool. To learn more about Roxanne, connect with her on LinkedIn.

Investment advisory services are offered through CGN Advisors, LLC, a fee-only SEC registered investment advisor. Tel: (910) FEE-ONLY. 

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