It’s always a tough conversation when someone walks into my office with million-dollar compensation packages and no real freedom. In my business, we call these deals golden handcuffs.
On paper, they’re thriving, with big bonuses, equity grants, and fancy job titles that sound impressive at dinner parties. But beneath that polish, a lot of them feel stuck. They’re not poor, but they can feel trapped—and that’s by design. Executive compensation is often structured to reinforce loyalty and longevity.
Golden handcuffs refer to the financial incentives companies use to retain high-performing employees. These usually come in the form of restricted stock units (RSUs), stock options, deferred bonuses, or other forms of long-term compensation. You get paid more for staying, but the cost of leaving goes up every year.
How the Handcuffs Tighten
This scenario usually starts the same. Early in your career, most of your compensation comes in cash—salary and perhaps a small bonus. Then you climb a little higher, and that bonus grows. Your salary starts to plateau, but now you’re getting equity.
Let’s say your annual bonus is $100,000. You might get $25K in cash and $75K in RSUs that vest over four years. The first year feels fine; you’re just deferring part of your income. But by the time you’re three or four years in, you’re looking at overlapping grants that vest on different schedules. If you leave, you forfeit two or three years of built-up bonuses. It’s like walking away from $500,000 or more. And that’s assuming your stock is holding steady.
Now, imagine those RSUs keep growing. You’re adding bigger grants each year. You’re also layering in performance-based options, which are contracts that only vest if the company hits certain revenue targets or EBITDA benchmarks. You may even need board approval to sell.
That’s when you’re no longer just working at a company. You are tethered to it financially and psychologically.
The Illusion of Wealth
Here’s the part that most people miss: just because something shows up on your statement doesn’t mean it’s yours. I’ve worked with clients sitting on millions in vested stock, but they can’t touch it.
One client wanted to buy a second home. Another had a daughter accepted to Duke and needed tuition money. They weren’t broke, but they were illiquid.
I knew someone who had over $7 million in stock. He was vested at $500,000, meaning any sale would create a massive taxable event. He could sell, sure, but the tax bill would be brutal. In that case, we structured a line of credit against his equity. It wasn’t perfect, but it gave him enough breathing room to make the move he needed without blowing up his tax return.
Golden handcuffs aren’t about being poor. They’re about being overexposed. If your compensation, your retirement, your children’s college fund, and your lifestyle are all tied to the same company’s stock, you’re walking a tightrope. One bad earnings call, and you lose your job and your nest egg.
That’s not wealth. That’s concentration risk.
A recent academic study published in the International Review of Economics and Finance supports this. Researchers found that executive equity incentive plans (EEIPs) reduced turnover for targeted employees by about 16%, but they also triggered higher turnover among non-targeted executives. Those folks saw a 43% increase in exits.
That tells you something. These plans work, but they also shift power dynamics inside the company. If you’re not part of the incentive pool, you’re more likely to leave. If you are, you’re more likely to stay, even if it’s not good for you.
How I Help Clients Plan Around It
If you’re in one of these comp structures, the goal isn’t to run, it’s to plan. One of the first things I do is discount future compensation. If it’s not vested and not sellable, I don’t count it as yours. It’s a promise, not a paycheck.
Next, we talk about divesting as you vest. You don’t have to hold onto every share like it’s sacred. If $200,000 in RSUs vest this year, take some of that off the table. Reinvest it in assets that have nothing to do with your employer. That’s how you build independence.
Sometimes, especially for C-suite clients, we also talk about timing: when to sell, how to do it without triggering compliance alarms, and how to avoid making a public signal that could tank the stock. When you need board approval to liquidate even a fraction of their holdings, that adds another layer of complexity—and stress.
And then there are those edge cases: clients who want to walk away. Sometimes, they’re just burned out. Other times, they’ve got a better offer. But it’s not always so clean. I had a client offered a dream job, but he’d be walking away from $900,000 in unvested equity.
That begs the question: How much is freedom worth?
When It’s Time to Walk
Golden handcuffs aren’t inherently bad. They’re just a tool corporations use.
If you’re being paid in equity, it’s because your company wants to keep you. Take it as a compliment, but worry that you owe them your future.
It’s easy to convince yourself that walking away is reckless, but staying in the wrong seat because of money is its own kind of failure.
A Forbes piece really nails the psychology of it. It described golden handcuffs as “perks and paychecks that become a cage.” The author, a psychologist, called out the identity trap, the fear that if you leave, you won’t be seen as successful. That can feel all too real, but it’s not. The job market doesn’t care how long you’ve been loyal. It cares what you can do next.
What’s Right for You?
Golden handcuffs aren’t always obvious. They start with opportunity—equity, bonuses, options. But over time, they can quietly reshape how you make decisions. You stop asking, What’s right for me? and start asking, What will I lose if I leave?
If you’re in that place, you’re not powerless. You just need a plan. That’s what I help clients build: a way to unlock your wealth without blowing up your future.