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:

 

Nonqualified deferred compensation plan

A nonqualified deferred compensation plan lets you set aside funds to benefit a select group of highly compensated managers. You can design a deferred compensation plan for employee pretax salary deferral, employer contributions or both. You can also specify when benefits are to be paid (e.g., after the passage of a certain number of years or at retirement).

 

Executive bonus plan

An executive bonus plan 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

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?

 

How BenefitCorp Can Help

Contact your BenefitCorp Financial Advisor for more information about the advantages and disadvantages of available executive compensation and executive benefits plans. He or she 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.