When a large share of your wealth is tied to a single employer, in salary, bonus, options and pension, a bad year can arrive on several fronts at once.
Senior executives often hold far more of a single company than they would ever choose to buy. Salary, bonus, vesting shares, options and sometimes the pension are all tied to one employer. While things go well, it compounds beautifully. The risk is that a bad year does not arrive politely on one front at a time.
If the company struggles, the share price, the bonus and the security of the role can all move together. The wealth that felt diversified across several lines turns out to be one bet wearing several costumes. This is concentration risk, and it is the most common blind spot we see in executive portfolios.
The answer is rarely to sell everything at once, which can carry its own tax cost and send the wrong signal. More often it is a deliberate, staged programme: selling tranches of vested stock on a schedule, directing new savings firmly away from the employer, and rebuilding a base of wealth that does not depend on a single payslip.
Framed through the 3Ls, the aim is simple. Enough liquidity that a difficult year at work is an inconvenience rather than a crisis, a lifestyle base that no longer rests on one company, and a legacy that is genuinely diversified. Concentration is fine as a way to build wealth. It is a poor way to keep it.