Your RSUs, a Widened IRS Rule, and a Higher Mega Backdoor Roth Limit: Three 2026 Changes Worth a Second Look

If you're a high-earning professional in San Diego's tech, biotech, or defense corridor -- Carmel Valley, Torrey Pines, Sorrento Valley, the Golden Triangle -- equity compensation is probably already the most complicated line on your financial picture. Three developments landing at the same time in 2026 are worth understanding together, even though they come from different directions.

1. A widened rule on how companies deduct executive and equity compensation

Under the One Big Beautiful Bill Act, the definition of "covered employee" -- the group whose compensation above $1 million a public company generally cannot deduct -- was expanded to include a company's controlled group, meaning compensation paid to a covered employee across related entities is now aggregated when testing against that $1 million threshold (Grant Thornton, 2025). This is a corporate tax provision, not a rule that changes how your RSUs are taxed to you personally. But it's a signal worth paying attention to: it reflects a broader tightening around how public companies structure and report compensation for their most highly paid employees, which can influence how equity grants, vesting schedules, and total comp packages are designed going forward.

For someone whose net worth is increasingly concentrated in a single employer's stock through RSUs and an ESPP, this is a good prompt to ask: if my company changes how it structures equity comp in response to rules like this, do I have a plan that doesn't depend on any one year's vesting or grant looking like the last one?

2. Mega backdoor Roth room just got bigger

Separately, 2026 retirement plan limits moved higher across the board. The standard employee deferral limit rises to $24,500, and the total combined contribution limit (employee plus employer plus after-tax) climbs to $72,000. For plans that allow after-tax contributions and in-plan Roth conversions, that opens up to $47,500 in mega backdoor Roth contribution space for the year -- calculated as the $72,000 total limit minus the $24,500 standard deferral (Empower, 2025; SmartAsset, 2025).

For dual-income households in tech or biotech where salary alone already covers most living expenses and equity comp is doing the wealth-building work, that extra Roth capacity is one of the few remaining ways to move a meaningful amount of money into tax-free growth each year -- assuming your specific plan document allows it, which not all do.

3. The doubt that never quite goes away

Underneath both of these is a question we hear constantly from HENRY-profile professionals (High Earner, Not Rich Yet): even with a strong salary, RSU vesting, and consistent 401(k) contributions, is it actually enough? Generic online retirement calculators tend to answer that question with a single number and a lot of unstated assumptions about concentration risk, tax treatment of equity comp, and Social Security. They rarely account for what happens when 30-40% of someone's net worth sits in one company's stock.

Consider a composite example: a Qualcomm engineer in her late 30s, contributing consistently to her 401(k), letting RSUs vest and mostly sit, and vaguely aware that a mega backdoor Roth exists but unsure whether her plan supports it or whether it's worth the paperwork. She's not behind -- but she also doesn't have a clear answer for how her equity concentration, her tax bracket, and her retirement timeline actually fit together.

Bringing it together

None of these three items requires an urgent reaction. But together, they're a reasonable prompt to revisit three things before year-end: whether your equity comp strategy still makes sense given how your company may be adjusting its compensation structure, whether your plan documents actually support mega backdoor Roth contributions at the new 2026 limits, and whether your overall plan accounts for concentration risk rather than just contribution totals.

Brad Stevens works with San Diego's tech and biotech professionals, including many in the Qualcomm and broader Golden Triangle ecosystem, to walk through exactly this kind of equity-compensation and retirement-readiness review during a complimentary conversation. Learn more onThe San Diego H.E.N.R.Y. Strategypage, or explore ourQualcomm-specific wealth strategy checklist.

Sources:Grant Thornton, "Compensation tax and the One Big Beautiful Bill Act," 2025;Empower, "What is a mega backdoor Roth?," 2025;SmartAsset, "Mega Backdoor Roth Limits in 2026," 2025.

This material is intended for general public use. By providing this content, Park Avenue Securities LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation, or to otherwise act in a fiduciary capacity. Financial professionals do not provide tax or legal advice. Tax laws are subject to change. Consult your tax and legal advisors regarding your individual circumstances.