Financial Planning for CEOs and C-Suite Executives

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General Advice Warning: The information on this page is general information only. It has been prepared without taking into account your objectives, financial situation or needs. The modelling on this page is illustrative and uses the stated assumptions; your own result will differ. Before acting on any of it, consider whether it is appropriate for you, having regard to your own objectives, financial situation and needs, and read any relevant product disclosure statement. You should obtain personal financial advice before making a decision about a financial product or strategy. The taxation of employee share schemes and termination payments depends on your own circumstances and on the plan and employment documents, and you should obtain tax advice.

An executive package looks like a large salary and is not one.

It is four or five different assets with different tax treatments, different timing and different risks, most of which are contingent on continued employment with a single company. That is the actual financial position, and it is why advice built around a salary figure does not work here.

This page goes through the package component by component and asks the same question of each: what is this worth, when is it taxed, and what happens to it the day you stop being an employee.

It forms part of how we advise high income professionals across Australia.

What is actually in a C-suite package?

Take a representative executive: base salary $600,000, short term incentive with a target of 50 per cent of base, and long term incentive of $500,000 a year granted as performance rights vesting over three years. Superannuation on the maximum contribution base. Total value in a good year, around $1.4 million.

Now separate it by character.

The last column is the whole page. Roughly two thirds of the package is contingent on continuing to work for one company, and a further part of it is invested in that same company’s shares.

What can I actually insure?

Considerably less than the package, and this is the largest and least discussed gap in executive financial planning.

Two separate constraints apply.

Group cover has limits. Salary continuance and life cover provided through an employer are written under a group policy with an automatic acceptance limit and an overall maximum benefit. An executive is almost always above the automatic acceptance limit, which means cover above it requires individual underwriting that many executives assume has already happened and has not. The cover also generally ends when the employment does.

Incentives are usually not insurable income. Insurers will typically consider base salary and, depending on the contract, an averaged portion of regular cash bonus. Unvested equity is generally not insurable income at all.

Run that against the package above. If only base salary is insurable, cover at 70 per cent produces $420,000 a year against a package worth $1.4 million. That is a 30 per cent replacement rate on the household’s actual income, described in the policy as 70 per cent cover.

Three things to check, and they are all in documents you already have.

Your employer’s group policy schedule, for the automatic acceptance limit, the maximum monthly benefit, the benefit period and whether the definition is any occupation.

Whether a continuation option exists that lets you convert group cover to a personal policy without underwriting when you leave, and how long you have to exercise it. This is the most valuable clause most executives never read, and it expires quickly.

And what income the insurer will actually accept, in writing, before you assume a bonus is covered. Our risk insurance strategy work starts from the schedule, not the summary.

When am I actually taxed on my RSUs and performance rights?

Under the employee share scheme rules, tax is generally imposed at the deferred taxing point rather than at grant, where the scheme qualifies for deferral.

The rules changed in a way that matters for anyone moving jobs. For employment ceasing on or after 1 July 2022, cessation of employment is no longer a deferred taxing point. It used to be, and it used to trigger a tax bill on unvested or restricted equity at the moment you resigned.

The remaining deferred taxing points are, broadly: when there is no longer a risk of forfeiting the interests and any disposal restrictions are lifted; for rights, when they have been exercised and there is no risk of forfeiting the resulting share; and in any case, fifteen years after the interests were acquired.

Three consequences.

Leaving no longer creates an immediate tax event on equity you have not received. That is good news, and it removed a real penalty on changing employers.

But you can now be holding a taxing point years after you have left the company, with no payroll to withhold tax and no automatic sale facility. Executives who left three employers ago and still hold restricted equity in each of them are common, and the tax arrives on the ATO’s schedule, not theirs.

And the taxing point is when the value is measured. Tax is calculated on the market value at the taxing point, not on what you eventually sell for. A holding that is taxed at $800,000 and then falls to $400,000 before you sell produces a tax bill on the higher figure and a capital loss on the lower one, and a capital loss can only be used against capital gains.

There is a further rule worth knowing: where the shares are sold within 30 days after the deferred taxing point, the taxing point generally moves to the date of sale, which aligns the tax with the cash. Confirm the position with your tax adviser before relying on it, because it interacts with the plan rules and any trading windows.

How much of my wealth depends on one employer?

Write down the number. Most executives have not.

For the package above, a single adverse event at the company can simultaneously remove the $600,000 salary, the $300,000 incentive, roughly $1.5 million of unvested equity, and reduce the value of the vested equity already held. If a portion of superannuation is also invested in the employer, that goes too.

That is not four risks. It is one risk, held four times.

The comparison worth making is with any other asset. Nobody would advise holding 70 per cent of a portfolio in a single listed company. An executive who holds vested shares in their employer alongside their salary, their incentive and their unvested equity is doing exactly that, and is doing it in the one company where they have the least ability to act on what they know, because of trading windows and insider trading rules.

The practical response is not complicated. Decide in advance what proportion of net worth may sit in employer equity, put it in writing, and sell down to that level in each trading window as tranches vest, mechanically, rather than deciding each time. The decision made in advance is almost always better than the decision made while holding the shares.

Should I sell vested equity, and what changed for 2027?

The tax reason to hold has become much weaker.

Once equity has passed its deferred taxing point, it has been taxed as income and holds a cost base equal to its market value at that point. From that moment it is simply a shareholding. Selling it is not a tax event beyond capital gains tax on any movement since.

Until 30 June 2027, an individual holding for more than twelve months accesses the 50 per cent capital gains tax discount, which is a real reason to wait. From 1 July 2027 that discount is replaced for individuals and trusts by cost base indexation, and a minimum 30 per cent rate applies to capital gains made by Australian resident individuals. Indexation still requires the asset to have been held for at least twelve months, but the benefit is a fraction of the old discount over short holding periods, because there is very little inflation to index over one or two years.

For an executive on the top marginal rate the effect is direct: after 1 July 2027, holding recently vested employer equity for a further year in order to halve the tax no longer works, because the tax is no longer halved. The tax cost of diversifying out of a concentrated employer holding falls sharply relative to the old rules.

There is also a transitional step. Shares held on 1 July 2027 are treated as sold and reacquired at market value just before that date, with the resulting gain deferred until an actual sale and keeping its existing discount treatment. Equity held before that date therefore retains the benefit of the old rules on the growth to that point. Make sure the market value at that date is recorded. Our tax minimisation strategies page covers the implications more broadly.

Why is my superannuation cap already full?

Because the superannuation guarantee alone consumes it.

The maximum superannuation contribution base for 2026 to 2027 is $270,830 a year. At the superannuation guarantee rate of 12 per cent, that produces $32,499.60 of employer contributions. The concessional contributions cap is $32,500.

An executive earning above the maximum contribution base therefore has essentially their entire concessional cap consumed by compulsory employer contributions, and no room to salary sacrifice at all. This surprises almost everyone who reaches that income level, and it is the reason the standard advice to salary sacrifice is not available here.

Two consequences follow.

Division 293 applies an extra 15 per cent to concessional contributions where income exceeds $250,000, so those contributions are effectively taxed at 30 per cent. That is still materially better than 47 per cent, and it is not a reason to opt out where opting out is even possible.

And non-concessional contributions become the only lever. The cap is $130,000 for 2026 to 2027, with a bring forward of up to $390,000 depending on total superannuation balance at the previous 30 June, and nil where that balance was $2.1 million or more. For an executive with several years of vested equity, a bring forward contribution funded from a share sale is often the single largest tax positive move available, and it has to be planned around trading windows.

Where the balance is heading past $3 million, Division 296 applies from 1 July 2026 and needs to be modelled rather than reacted to. Our retirement planning work covers the drawdown side of that.

What happens if I leave, or am asked to leave?

This is where the numbers get large and where the difference between two similar looking exits is enormous.

Take an executive aged 52, base salary $600,000, ten complete years of service, receiving a $900,000 termination payment.

If it is a genuine redundancy. A tax free amount applies: $13,598 plus $6,801 for each complete year of service, which is $81,608. The remaining $818,392 is an employment termination payment. Up to the ETP cap of $270,000 it is taxed at 32 per cent including the Medicare levy, because the executive is under preservation age, and the balance is taxed at the top marginal rate of 47 per cent.

Tax: $86,400 on the first $270,000, plus $257,744 on the remaining $548,392, totalling $344,144. Net cash: $555,856.

If it is not a genuine redundancy. No tax free amount applies, and the whole-of-income cap applies instead of, or alongside, the ETP cap. The whole-of-income cap is $180,000 reduced by other taxable income for the year. An executive with $600,000 of salary already has no whole-of-income cap left, so the entire payment is taxed at 47 per cent.

Tax: $423,000. Net cash: $477,000.

The difference between the two is $78,856 on the same $900,000. Whether a departure is characterised as a genuine redundancy is a legal and factual question, not a drafting preference, but the point stands: the characterisation is worth more than most of the negotiation that surrounds it, and it is usually settled before anyone models the after tax outcome.

Four other items belong on the exit checklist and are routinely missed.

Unvested equity: what lapses, what is retained at board discretion, and what the deed actually says rather than what was said in the meeting.

Group insurance: it ends. Check the continuation option and its deadline before the last day, not after.

Restraint and gardening leave: income during the restraint period, and whether it counts as insurable income.

And the timing of the payment across financial years, which can change the whole-of-income cap position materially.

I am also on boards. What personal exposure does that create?

Real personal exposure, and it is separate from the executive role.

Directors carry duties under the Corporations Act personally. Directors can be made personally liable for certain company obligations, including unpaid pay as you go withholding and superannuation guarantee amounts through the director penalty regime, and for insolvent trading. Directors and officers insurance responds to some of this and not all of it, and the deed of access, indemnity and insurance the company gives you determines a great deal.

Three questions to answer for every board seat: what does the directors and officers policy cover and what is excluded, what does your deed of indemnity say and does it survive your resignation, and is there run off cover after you leave.

This exposure also shapes where personal assets sit, and it is one of the reasons executives with board seats should review asset ownership with a lawyer rather than assume the family home is beyond reach.

What does my estate plan need that a salaried plan does not?

Three things a standard plan will not have.

Instructions for the equity. What happens to unvested rights on death is determined by the plan rules, and they vary. Someone needs to know which plans exist, at which former employers, and where the documents are. This is the single most common gap in executive estates.

A superannuation death benefit calculation. A death benefit paid to an adult child, who is not a tax dependant, is taxed on the taxable component at 17 per cent including the Medicare levy for the taxed element, and 32 per cent for the untaxed element. For a large executive balance that is a substantial number and it is manageable if it is known.

A liquidity plan. An estate whose assets are concentrated in one company’s shares, subject to trading windows and possibly to an escrow arrangement, can be asset rich and unable to pay tax or provide for a family for months. Our estate planning strategy work addresses that with your lawyer.

What we do

We start from the documents: the employment contract, the incentive plan rules, the group insurance schedule, the deed of indemnity and the superannuation statement. Most of the decisions on this page are already determined by those documents, and most executives have never had them read together.

Then we build the plan around the fact that most of the package is contingent, and around a written policy for how much of your net worth may sit in one employer.

If you would like to work through your own position, request a consultation or call 03 7034 4888. We are at Level 1, 55 Collins Street, Melbourne, and we advise clients across Australia.

Sources

1. Australian Taxation Office, Key employee share scheme changes in detail, for the removal of cessation of employment as a deferred taxing point for employment ceasing on or after 1 July 2022, and the remaining deferred taxing points including the fifteen year limit.
2. Australian Taxation Office, Employment termination payments, for the 2026 to 2027 ETP cap of $270,000 and the genuine redundancy tax free base of $13,598 plus $6,801 per complete year of service.
3. Australian Taxation Office, Contributions caps and Division 293 tax, for the 2026 to 2027 caps, the maximum superannuation contribution base and the Division 293 threshold.
4. Treasury Laws Amendment (Tax Reform No. 1) Act 2026, No. 49 of 2026, royal assent 26 June 2026, for the replacement of the capital gains tax discount with cost base indexation from 1 July 2027, the minimum 30 per cent rate on capital gains, and the deemed disposal of assets held at 1 July 2027.
5. Australian Taxation Office, Schedule 12, tax table for superannuation lump sums, for death benefits paid to non-tax-dependants.