Core Business Services
While MBL Advisors is proud to serve three Fortune Fifty clients, the majority of our work is focused on privately held businesses, portfolio companies of private equity firms and small cap public companies.
Executive Compensation Consulting—SMILE ™ (Strategic Management Incentives for Long-term Employees)
With SMILE™ we have developed and trademarked a proprietary process to help privately held businesses align their long-term strategic goals with long-term management compensation. Every successful business has a team of key players that are critical to achieving the long-term success of the business. Paying executives a salary and annual bonus without equity participation may not be the most effective way to achieve corporate long-term strategic goals.
As part of the SMILE™ process we evaluate a number of alternatives including:
- Phantom stock
- Stock appreciation rights
- Profit participation plans
- Restricted stock or Stock options
- Enhanced Nonqualified Deferred Compensation
- Off balance sheet plans for S Corporations and pass through tax entities
- Family business compensation consulting including aligning non-family executive compensation with long term family goals
With SMILE™, owners are happy when the growth goals are achieved and management is happy to participate in the upside.
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 – 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.
- Long Term Profit Sharing Plan- Most privately held businesses have no method of rewarding management beyond the annual salary and bonus. A profit sharing plan can align the goals of the business with the compensation of the management team on a long term basis. Great flexibility is available regarding the amount of the award and vesting schedules to create a win-win scenario.
- Bonus Life Insurance– A popular method of providing long term rewards for non-shareholder executives in Sub S and pass through tax entity businesses, a bonus life insurance plan can be structured to mirror popular benefits available to publicly traded C corporations. Many variations exist such as a double bonus where the participant receives a bonus of the premium and a bonus of the income tax associated with the premium.
ZIPIssue™ (Zero Insurance Physical) Supplemental Life Insurance
We have developed a self-directed next-generation executive benefit plan that helps bridge the retirement gap by focusing on the wealth accumulation and/or longevity risk needs of participants. The plan offers flexibility in designing a wholesale priced life insurance policy with a focus on high cash value accumulation, death benefit protection or long term care coverage depending on the specific needs of the executive.
Supplemental Disability Insurance
One of the most overlooked forms of reverse discrimination is the actual income replacement ratio of long term disability benefits for highly compensated professionals. Group LTD plans designed for rank and file employees often cap benefit maximums and limit eligible compensation to salary only. Highly paid professionals often operate under the illusion of receiving coverage for total compensation when they will receive a lower income replacement than the rest of the non-highly compensated workforce.
Before the Great Recession the number one reason cited for home foreclosures in America was a disability event to the household’s primary wage earner. While medical insurance grabs the headlines, the lack of a sustainable income can ruin even the best financial plan on a long term basis.
We currently administer thousands of policies for executives and professionals to eliminate the often unintentional reverse discrimination and provide disability income replacement at a level that meets the expectations of participants and the HR department. Supplemental disability policies are available on a guaranteed issue basis or through our ZIPIssue™ (Zero Insurance Physicals) program.
MBL Advisors recognizes the importance of a cost-effective, well designed retirement plan as part of a total rewards program for your company. Our consultative, results driven process is designed to minimize fiduciary risk and enhance participant outcomes. Upon initial engagement we focus on the following critical areas of concern:
- Plan Design: Our experience in developing SMILE™ (Strategic Management Incentives for Long-term Employees) provides a unique approach in designing qualified plans to help maximize the value of the plan for ownership, highly compensated employees and rank and file employees.
- Plan Expenses: Through benchmarking studies and Requests for Proposals, we help provide the resources to make sure the plan is competitively priced based on the services being delivered. High fees for low or no service is a significant fiduciary issue for plan sponsors.
- Investment Options: As an ERISA 3(21) fiduciary we work side by side with the Plan Sponsor. We review and revise the Investment Policy Statement to create a framework for investment selection and ongoing performance monitoring.
- Fiduciary Risk: Our fiduciary process is designed to minimize risk to the Plan Sponsor. We provide the Retirement Plan committee the tools necessary to minimize risk and stay in compliance.
- Service: We work with the other plan providers to assure the service commitments are being honored in the eyes of the participant and Plan Committee. Our service team is always ready and able to assist.
We have worked with privately held businesses and public companies in a wide range of industries such as manufacturing, distribution, medical providers, information technology, financial services and law firms.
Business Valuation Services
Many of our clients need business valuations on an ongoing basis for equity-based compensation plans, estate planning purposes or business exit planning scenarios. We offer valuation services that are compliant with 409A valuation requirements and IRS regulations for income and gift tax purposes. The valuations are completed by an independent Certified Valuation Analyst (CVA).
Some business owners are interested in a quick market valuation for business exit planning or acquisition planning purposes, so we offer an alternative valuation through a software provider that has completed over three million valuations during the last fifteen years.