Typical comp shape
Principal engineers usually earn large rsu + psu grants. Common employers include Amazon, Microsoft, Oracle. Principal-level PSU tranches vest on multi-year performance windows, so cliff vests can concentrate income into one tax year.
What Michigan changes
In Michigan, every RSU vest, NSO exercise, and ESPP purchase carries 4.25% state tax on top of federal. For a senior principal engineer with $300k+ of equity income, the state layer routinely adds $25-45k to the annual bill.
Planning cadence
For a principal engineer in Michigan, the three planning windows are: after each RSU vest (withholding check and sell-vs-hold), before any ISO exercise (AMT model at federal only), and in Q4 (estimated tax top-up to clear the safe harbor).