Executive Benefits

Key employees are an indispensable component of any sustainable/successful business.

They are also a critical ingredient to whatever exit strategy an owner ultimately designs. Key Employee often ARE your chosen successors. In family transitions, they are essential to the on going success of the business. An outside buyer places significant importance on two primary concerns, the company's  earnings or  EBITDA (Earnings Before Income Taxes Depreciation and Amortization) and the quality of it's management team. They want to know if the management team will stay beyond the sale. 

Designing compensation strategies that motivate and retain key employees is often considered the single greatest value driver an owner can employ. Identifying the key elements that create the kind of financial and psychological rewards Key Employees seek is paramount. 

Items to Consider:

Let our experience benefit you as you evaluate the following issues;

Characteristics of a Key Employee: How to distinguish them? One needs to differentiate "key employees" from "employees in key positions".  

Design Characteristics: There are five critical components to ensure your plan is effective.  

Stock Based Plans: Advantages and Disadvantages. Types of Issuance; Incentive Stock Options or Grants, Stock Bonuses, Stock Gifts

Cash Based Plans: Advantages and Disadvantages. Type include Deferred Compensation, Phantom Stock, Stock Appreciation Rights.

Conditions that Favor Cash vs. Stock Plans:  Family Business Considerations, Employees Age and motivation.

Accounting/Tax Issues: Does the company have to account for the liability? Is the plan a deductible expense? When do Key Employees need to recognize income?