For many senior professionals and executives, career success brings more than just a salary. It often includes short- and long-term incentive plans (STIP and LTIP) and employee share schemes. These programs are designed to reward performance and align leadership with shareholder outcomes.
These incentives can be powerful wealth-building tools. But they’re also complex. The timing of vesting, tax implications, and the risk of concentrated exposure to a single company can make it difficult to know whether these rewards are truly building enduring wealth…….or simply passing through as another lumpy income event.
At Capital Partners, we view these moments not as complications, but as opportunities to capture core wealth, transforming high-income years into long-term financial confidence.
The executive challenge
Executives operate in high-performance environments. With time and energy focused on leading teams, delivering results, and balancing family life, it’s easy for financial strategy to fall behind. The most common challenges we see include:
- Lumpy income and tax surprises: Equity vesting or STIP payments can trigger significant tax events if not anticipated and planned for.
- Concentration risk: A growing portion of wealth tied to employer stock can create unnecessary exposure to a single company’s performance.
- Lifestyle creep: Cash bonuses can be quickly absorbed into day-to-day spending, rather than directed into long-term wealth.
- Missed opportunities: Without a clear plan, incentives come and go, without being optimised for lasting impact.
Turning incentives into enduring capital
Each time a STIP, LTIP, or share scheme vests, you face a decision point. Left unmanaged, it’s just another deposit. But with planning, these moments become structured opportunities to build core wealth. The foundation of long-term prosperity.
1. Tax alignment
Proactive planning around vesting dates and income timing can reduce tax drag and preserve more capital. Coordinating with your accountant ensures you’re not leaving money on the table.
2. Diversification
While loyalty to your employer is admirable, concentrated exposure introduces risk. Systematically selling down vested equity and reallocating into a diversified portfolio protects your family’s financial future.
3. Core wealth allocation
Redirecting incentive proceeds into the right investment vehicle, superannuation, or alternative structures transforms “bonus income” into enduring capital—aligned with your broader goals.
A real-world example
Recently, we worked with an executive whose LTIP vested, creating nearly $900,000 in taxable equity in a single year. Without planning, the tax impact would have been significant—and the temptation to hold all shares was strong.
Instead, we:
- Coordinated with their accountant to offset gains and reduce tax,
- Allocated a portion of proceeds into their family investment trust, and
- Used the remainder to fund lifestyle goals—without compromising long-term capital.
The result? Lower tax, greater diversification, and peace of mind that this reward became a building block of lasting prosperity.
Incentive structures reflect the immense contribution executives make. But the real reward comes when those incentives are captured, secured, and grown into family wealth.
At Capital Partners our role is to simplify the complexity and bringing clarity, structure, and confidence to your financial life, turning high-income years into a legacy of enduring prosperity.
Because true wealth isn’t just about what you earn, it’s about what endures.
