Hi There:
S Corp wages to officer shareholders should be based on the fair market value of service provided to the company. In theory company profitably should not effect officer wages. However, in reality it could be different due to cash flow. A year end bonus is a good idea if needed to achieve fair market value of service.
S Corp - will pay additional employment taxes on year end bonuses and issue W2's and K1's, reporting income to all shareholders.
Individual - A higher W2 could lead to an higher retirement account deduction and lower net investment income tax-If applicable. From just an income perspective, a combination W2 and K1 should not by themselves increase individual income since a higher W2 will lower S Corp pass through income.
