Executive Benefits for Public Companies

Executive benefits can be a key component of a total rewards program for key management personnel. Rewarding and retaining these important individuals can be challenging in today's competitive environment for talent. Below are a few executive benefit programs to consider offering your key employees:

Nonqualified deferred compensation plan:

Based on limitations in 401(k) plan contributions, many key people are limited in their ability to save for retirement. A nonqualified deferred compensation plan allows a select group of highly compensated employees to save additional income for retirement with IRS limits. Plans can be designed to a defer compensation for employee pretax contributions, employer contributions or both like in a Mirror 401(k) Plan.

Executive bonus plan:

The corporation can help bridge the retirement gap by funding a specially designed life insurance policy on behalf of a group of key people. The premiums are tax deductible to the company and can provide benefits like survivor income, retirement income and estate liquidity to the executive. Golden handcuffs can be added to the plan through a restrictive endorsement and a vesting schedule. Depending on the size of the group, coverage may be available on a guaranteed issue basis without medical underwriting.

Executive disability plan:

Group LTD plans designed for rank and file employees often cap benefit maximums and define salary as eligible compensation. Highly paid management often operates under the illusion of receiving coverage for total compensation when in reality the higher the income, the less that will be replaced without a supplemental executive plan in place. An executive disability plan can stabilize LTD rates on a long term basis and eliminate surprises in benefit payments in the event of a disability claim.

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