Houston’s Highest-Paid Executive Gets $69 Million in Stock, a $3.9 Million Bonus and a $1.3 Million Salary. Social Security Can Treat the Pieces Differently

The Houston Chronicle ranked Sable Offshore (NYSE:SOC) CEO Jim Flores as the region’s highest-paid executive for 2025, even as the company contends with an ongoing federal probe tied to alleged insider trading. His reported compensation came to about $76 million: a $1.3 million salary, a $3.9 million bonus and $69 million in stock awards.

A hypothetical 64-year-old executive approaching retirement with a smaller pay package might assume Social Security counts every dollar as wages in the same year.

Social Security sorts the pieces differently. Salary and cash bonus count as wages when paid, while stock compensation runs on its own schedule, and any growth after shares vest is generally investment gain. These categories determine what goes on his earnings record, what gets taxed, and whether his checks are held back while working.

Salary Alone Can Max Out a Year’s Social Security Earnings Record

Cash salary and cash bonuses are wage income. Both count toward wages on his W-2 until he hits the annual taxable maximum, which is $184,500 for 2026.

At the 6.2% employee rate, the most he can pay for the year is $11,439.

Say he earns $200,000 in salary in 2026. He’s already over the cap before any stock vests. If another $500,000 of stock then vests, he still owes federal income tax on it, but none of it adds to his 2026 Social Security earnings record. Once he hits the cap, additional pay that year cannot increase the earnings Social Security credits for that year.

Grant-Date Value and Payroll Timing Run on Separate Clocks

Sable’s proxy reports the stock award at grant-date value, as SEC rules require. Flores received 3.5 million restricted stock units vesting over nine years: 10% annually for eight years and 20% in year nine.

With restricted stock units, wage income is recognized when the award vests and shares are delivered. The headline number and actual payroll events spread across nearly a decade, each valued at the stock price on that vesting date.

How One Block of Shares Moves From Paycheck to Portfolio

Take a simple example. Units worth $200,000 vest. That amount becomes wage compensation, and it also becomes his starting cost for the shares. He holds on, and the shares rise to $300,000. The extra $100,000 is growth on property he already has. If he sells, that growth is capital gain.

The shares stay the same, but they pass through three categories: stock award, then wages, then investment gain.

Why This Hits Harder at 64 Than at 45

Say he’s 64, still working and already collecting Social Security. Before full retirement age (FRA), Social Security holds back $1 of benefits for every $2 earned above $24,480 in 2026. Vested stock counts as earnings too.

On a $200,000 salary alone, the amount held back comes to $87,760. That’s enough to wipe out a $4,000 monthly benefit, or $48,000 a year. Social Security does give credit for those months later, recalculating his benefit to account for the payments it held back when he hits full retirement age.

Capital gains from selling shares don’t count toward the earnings test but do count toward the income figure the IRS relies on when determining the taxable portion of his benefit. Selling a large amount in one year can make more of that year’s checks taxable.

Five Points From the Equity Plan

1. Award type: Restricted stock units, restricted stock and options follow different tax schedules.
2. Vesting and settlement dates: For RSUs, these generally determine when compensation becomes taxable wages; options and restricted stock can follow different timing rules.
3. W-2 boxes track different wage figures. Box 1 shows wages for federal income tax, Box 3 shows Social Security wages up to the cap, and Box 5 shows Medicare wages with no cap. A large vest can raise Boxes 1 and 5 while Box 3 stays at the cap.
4. Cap status: Check whether salary has already hit the $184,500 limit before a vest lands. If it has, the vest adds nothing to your earnings record.
5. Basis and sale schedule: For RSUs, the value recognized as compensation generally becomes the starting basis in the shares. Later appreciation can become capital gain, which the earnings test ignores but the benefit tax formula counts.

What to Settle Before You Claim

If your salary alone would cancel your benefits under the earnings test, taking before FRA creates mostly paperwork and held-back checks. Consider when you sell vested shares: spreading gains across tax years can change how much Social Security becomes taxable in each year, so compare the actual tax results before choosing a sale schedule.

A pay table can put salary, bonus and stock side by side as if they were interchangeable. Each one follows its own timeline under the program. Your own vesting schedule, taking age and tax situation will shape how these rules play out, so go through your plan documents one line at a time.

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