What you need to know about hitting Director, VP, or SVP status

Moving into a Director, VP, or SVP role can significantly change your financial picture. Your compensation increases, but so do the tax complexities, benefit choices, and planning decisions you’re expected to make often without clear guidance.

Tax planning gets more complex

As your income rises, so does the tax pressure. Hitting higher salary and bonus levels puts you into new territory that affects how much you owe and what strategies are available to you.

Here are a few key shifts:

• Phaseouts kick in:
  Once your adjusted gross income (AGI) crosses certain thresholds, you may lose access to deductions like student loan interest, or credits like the child tax credit or dependent care credit.
• Roth IRA and traditional IRA rules change:
  At higher income levels, you can’t deduct contributions to a traditional IRA, and you may be ineligible to contribute to a Roth IRA at all.
• Additional taxes apply:
  • The Net Investment Income Tax (NIIT) adds a 3.8% tax on investment gains if your AGI is over $200K (single) or $250K (married).
  • The Medicare surcharge increases your payroll taxes once you cross $200K in W-2 income.
  • You may also become subject to Alternative Minimum Tax (AMT) if you have incentive stock options or large itemized deductions.

At these levels, tax planning isn’t optional. You need to actively coordinate salary, bonuses, and equity with a forward-looking strategy.

>> Download the 2025 Key Financial Numbers PDF for the full AGI phaseout chart <<

Benefits packages get bigger and more confusing

Executives often receive access to a wider range of benefits than they did in earlier roles. But more options don’t always make things easier.

You might now have:

• Supplemental disability insurance
• Deferred compensation plans
• Non-qualified retirement plans
• Group legal or financial planning support

These can add real value, but they require evaluation. Are they portable if you leave? Are the costs reasonable compared to private alternatives? Should you use all of them, or just a few?

A good financial plan reviews these annually, not just during open enrollment.

Executive compensation adds new layers

Once you move into a Director or VP role, base salary is no longer the only part of the story.

You may now receive:

• Restricted stock units (RSUs)
• Stock options (NSOs or ISOs)
• Performance-based equity
• Deferred compensation elections
• Retention bonuses

Each type of compensation has its own tax treatment and planning windows. For example:

• ISOs can trigger AMT if not managed properly.
• Deferred compensation is often irrevocable once elected and taxed upon distribution.
• Equity grants may have vesting cliffs or expiration dates that affect when you can sell or exercise.

Make sure your equity aligns with your goals for liquidity, taxes, and career risk. These are not set-and-forget decisions.

The Bottom Line

The jump to a Director, VP, or SVP role brings a lot of opportunity, but it also requires a different level of financial planning. The tools, tax rules, and benefit choices get more complex the higher you go.

You don’t need to master all of it on your own. But you do need to stop assuming your old system still works.

→ Download the 2025 Key Financial Numbers PDF to see where your income stands in relation to tax limits and benefit rules.