Executive Compensation
In a small business setting, it could take years to find or develop the executive talent needed to build the business to the next level. Executive talent is hard to come by, and it is even more difficult on the business when it walks out the door in pursuit of another opportunity.
When key executives are presented with a strong monetary incentive package, they are more likely to stay and utilize their talents where they feel appreciated and appropriately rewarded. Structured incentive plans can help keep key executives in place and motivate them to higher levels of performance.
Plans such as Non-qualified Deferred Compensation, Executive Bonus, and Split Dollar Life Insurance are life insurance based plans that enable the business to offer current and future benefits to their key executives in exchange for their continued service for a specified period of time.
Benefits For Your Business And Employees
There is a direct link between business success and employee benefits. Some of the most successful businesses are those with satisfied employees. And it shouldn’t surprise anyone that some of the most satisfied (and productive, dedicated and loyal!) employees are those that are content with the employment benefits provided by their employer.
But just as success doesn’t automatically happen in business – it takes dedication and hard work; putting together an equitable employee benefits package requires careful planning and foresight.
Business Retirement Plans
The creation of the Simplified Employee Pension (SEP) and the Savings Incentive Match Plan for Employees (SIMPLE) affords smaller businesses a way to offer their employees a retirement plan. The SEP and SIMPLE were designed for businesses with fewer than 100 employees and are generally less costly to administer than other retirement plans. For employees, they are easy to understand and provide a convenient way to save for retirement.
As qualified retirement plans, SEPs and SIMPLEs enjoy the same tax treatment as other plans. Contributions by employees and employers are tax-deductible or made on a pre-tax basis, and the accumulation inside the accounts grows tax-deferred. The same restrictions apply: withdrawals made prior to age 59 ½ may be subject to an early withdrawal penalty.
For businesses seeking more robust retirement savings options, 401(k), 403(b), and 412(e)(3) plans provide additional flexibility and benefits. These plans are well-suited for larger organizations or those with employees seeking higher contribution limits and additional investment features.
Succession Planning
When entrepreneurs start a business, the last thing on their minds is succession planning. Most business owners spend a lot of time – as they should – on Operations Plans, Marketing Plans, Capital-spending Plans, Maintenance Planning, Staffing Plans…and more. But what about Succession Planning? Wouldn’t you like an orderly “exit” from the business, once it’s time for you to take a back seat?