Getting overruled

 I have a new-to-me situation with my team's upcoming performance review cycle.

My company operates on a 5 point rating system. For the lack of a better term, a "3" is a default rating - it indicates the person is completely doing their job well and meeting all requirements and expectations. That rating comes with a performance bonus (10-15% of annual salary) plus a bump in regular pay.

A "4" means exceeded expectations in some way, and a "5" means you basically performed off the charts; grand slam at every at-bat. A "4" comes with a 20-25% bonus and a "5" comes with around a 35% bonus. There is no set curve, but "4's" and "5's" are scrutinized carefully (as are "1's" and "2's") Around 75% of the organization ends up with a 3, 15% with a 4, 5% with a 5, and the remainder have some work to do at 1 or 2.

We perform a calibration process at every level in the organization to make sure peer managers are rating reports fairly. This continues up the org chart until it gets to the executive team. One level will often challenge ratings agreed by the lower level, and this is usually someone who was rated as a 5 or 4 being moved down to a 4 or 3.

I'm in a new situation where I have a direct report, who is a manager herself. She's been in the role about 18 months; this is her first full year cycle. She is generally among my top performers (she worked for me as an individual contributor prior to her role as manager) She and I both listen to MT, and we openly discuss her upcoming rating during our O3's. She performed fairly well this year, and I was honestly on the fence about whether or not she earned a 4, but after reviewing her goals for the year along with accomplishments, I rated her that way. The rating was challenged and stood up through 2 levels of the calibration process.

The last level was the executive level. A day after their meeting, I noticed her rating had been moved from a "4" to a "5". I asked my manager about the change, and he indicated that she was given the higher rating by a VP up the chain from me "because she helped the VP out".

My options with this VP are fairly limited. My question is how do I deliver this performance appraisal? She hit a few home runs last year, but she wasn't a star player. She's the kind of person though that takes feedback to heart and improves year over year. My concern is that she gets a "5" this year and thus she assumes everything is perfect, or alternatively, she continues to improve things and next year I'm unable to "sell" her well-earned "5" rating at that time. What message would you deliver?

Thanks.