Executive Compensation Plans & Benefits
Executive Compensation Packages
Like many other businesses, your company may employ key executives who are critical to your success. Retaining these important individuals can be challenging in today's competitive environment. That's why you should consider implementing an executive benefits plan in addition to executive compensation packages.
There are many different types of executive benefits plans designed to help you compensate executives and encourage them to remain with your company for many years. Below are executive benefits and executive compensation packages you may want to consider offering your key employees:
Executive bonus plan. Executive benefits often include a bonus plan, which is a way to compensate select employees, regardless of their income and position, by paying a cash bonus to the employee or by directly purchasing an investment on the employee's behalf. The bonus is a tax-deductible expense to the employer and taxable compensation for the employee.
Executive life insurance. Key executives who are highly compensated often have unique life insurance needs. To protect their families, they need a way to replace their compensation in the event of premature death.
Designing executive compensation packages requires analyzing your business goals and the needs of your employees. Some issues you may want to consider include:
- Who should receive the tax deferral -- the employee, the corporation or both?
- Does the employee want to save more on a pretax basis?
- Does your corporation need "golden handcuffs" to help retain key employees?
Contact your Financial Advisor for more information about the advantages and disadvantages of available executive compensation packages and executive benefits plans. The two of you can then work with your company and its tax and legal advisors to help design and implement an executive compensation package that balances the needs of your corporation and its participants.
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