Business owners face numerous challenges. Hiring and keeping high quality employees is usually in the top three challenges entrepreneurs consistently struggle with. We’re here to help!
There are significant differences between offering benefits to all employees and offering benefits just for your key, critical team members. While there may be good reasons to offer companywide benefits to all employees, we’re not discussing that in this conversation. This conversation is how you attract and keep high quality, key people to the top echelons of your team.
Offering programs that provide a “Golden Parachute” to your key employees can be a Win/Win for both you and them. This strategy can provide you with a targeted benefit program for just a handful of key people. It can also give your company tax deductions, capital for growth, employee goodwill, and replacement capital for catastrophic loss due to an untimely death or disability of a high quality key person. This same program can provide your key support people with a quality non-qualified deferred compensation plan for their personal retirement, premature death, and disability needs.
Your Key Person strategy can also be a “Golden Handcuff” for your high quality, key support people. Your key person solution can have a long term vesting schedule, chosen by you, that requires employees to stay with you for an extended time period to receive the benefits you’ve provided them. On the flip side, if they leave prematurely, you can keep all, or a portion of the benefits you’ve provided for them.
Not all strategies are available to, or right for, all entrepreneurs and most advanced tax strategies have significant risks and restrictions in return for the tax advantage. For this reason, all advanced strategies should be reviewed by your tax professional.
We’d be honored to review your current or desired Key Person Strategy. Contact us for your complimentary consultation to make the most of your Key Person Employee Benefit Plan.