Finding a balance between executive incentive plans and benefits is critical for your business’s success and the perception of your company culture to your employees. Key executives’ value to your business makes a difference in its financial performance, and these talented individuals deserve to be fairly compensated.
We can help you create enticing executive benefits packages with benefits that add value to their lives. As your outsourced human resources benefit specialist, we can help you manage your benefits costs while still being able to offer executive perks that attract – and retain – the top talent in your area. Offering attractive benefits packages may sway executives on the fence about leaving your company.
You may wish to include one or several of these plan designs and even consider installing a vesting period for benefits, a pair of “golden handcuffs” that make it more difficult for key employees to walk away from. Furthermore, each plan may be non-qualified, meaning that you, as the employee, may choose which executives to compensate accordingly.
Executive Disability Plan
An illness or accident that affects your executive’s ability to complete their job duties is one of the biggest fears of many workers. The Standard Group Long Term Disability (GLTD) offered by many companies may not provide the coverage that a highly compensated employee requires due to the monthly benefit caps, limited features, and exclusion of performance-based pay.
Employers have the flexibility to pay for some, all, or none of this benefit. You may offer a supplemental disability plan with higher coverage and compensation and allow your executives to purchase the coverage if they so desire. A Supplemental Individual Disability Plan may be offered at a discounted price for executives, with your business making up part of the cost. For companies in a high-risk industry, such as oil and gas or construction, where an executive may make regular field visits, offering better disability coverage can make a difference if other companies aren’t offering similar coverage.
Non-Qualified Deferred Compensation Plan (NQDC)
NQDC plans are popular with larger, publically traded corporations and nonprofits alike. These may be your top executive’s primary retirement fund and a huge incentive for your executives. Essentially, this plan’s design allows participants to defer a larger part of their salary than Qualified Plans such as 401k. Plus, taxes are deferred until the enhanced benefits are paid.
Employers may contribute to NQDC plans on behalf of executives, enhancing the benefits and rewarding top performers. However, there are a couple of stipulations for these plans. First, deferred compensation plans are unfunded, which means these funds may be subject to collections by the business’s creditors. Furthermore, deferred compensation arrangements are highly technical and must comply with specific IRS regulations.
With a sufficient vesting period, this benefit can improve retention by paying the benefit out over the time spent with the company. If you’re interested in NQDC, you should work with an experienced benefits firm, like HBC, to ensure that the plans are set up and managed correctly and all IRS obligations are fulfilled.
A Leveraged Executive Bonus Plan
Cash bonuses are a typical part of executive benefits plans. However, instead of giving outright cash bonuses to your executives, give them a bonus that pays a premium on a life insurance product with cash value, which the executive owns and controls from the day it’s issued.
The benefits of this type of bonus include the following:
- Death benefits their family
- Tax-free access to the cash value
Your firm may opt for a written agreement with an executive to loan them a bonus to cover the premium’s taxes. If the executive breaks this agreement, they pay these monies back. And the employer may forgive the loan at any time, such as after X number of years of employment or meeting certain performance metrics.
Executive Medical Reimbursement Plan
Executive medical reimbursement can cover a wide range of benefits, providing tax-advantaged and fully insured reimbursements for non-covered expenses. These include medical treatments not covered by traditional insurance, such as elective surgeries or experimental treatments. It can also cover the following:
- Infertility treatments
- Durable medical equipment
- Transportation to medical appointments
- Psychiatric and mental health care
Employers may also tailor these benefits for each executive’s family.
Executive Team Benefits From Holloway Benefits Concepts
Are you searching for structured benefits to attract and retain top talent for your company? Do you need innovative ways to compensate your top performers without increasing salaries? Holloway Benefits Concepts can help you structure a benefits package that meets the needs of your executives and provides an enticement for them to stay with your company. Contact us today to see how our innovative human resources and employee benefits support can help you grow your company.