Executive Benefits in the Marketplace

Assembling the perfect leadership team can often take years to achieve. They’re at the forefront of your company’s success. But what happens if they start to feel undervalued and are lured to another company with more perks? High-value employees often weigh the perks and stability offered by their employer. With this in mind, it could be time to take a look into your executive benefits.

While many are familiar with the standard perks of 401(k) plans and health insurance, executive benefits offer a unique look into what your executive team could be missing out on.

What are executive benefits?

Executive benefits are specialized plans tailored to provide top employees such as senior leadership or executives, with benefits that fit their needs.

These benefits are designed to:

Attract and retain top talent

Your executive team is crucial to your company’s success. Providing benefits that address their unique needs shows you understand the competitive market. A carefully structured “Golden Parachute” plan could tie an executive to their role, potentially until retirement, safeguarding your company against turnover at critical times.

Protecting employee financial stability

Providing comprehensive benefits that emphasize financial stability showcases your company’s commitment to employee well-being, both to your executive team and prospective hires. These benefits can include robust retirement plans, income protection options like enhanced disability coverage, and stock options, all designed to support long-term security and peace of mind.

Fair and ethical benefits structure

Programs should feel equitable across the board. However, many executives are unknowingly left with gaps in their coverage. With a well-designed executive benefits plan, employers can effectively balance concerns without discriminating against other employees. For example, non-qualified life insurance or disability plans can be arranged specifically for a small group of leadership on a guaranteed issue basis while maintaining compliance with existing laws.

Types of executive benefits

While there are many options to choose from, some benefits are more impactful for executives. These options can provide greater value by addressing specific challenges executives may face.  

Enhanced disability plan

Traditional group disability plans often fall short when it comes to covering individuals with higher incomes. These plans typically cover 60% income replacement for individuals earning up to $5,000 or $10,000 per month. This is adequate for those earning $200,000 or less per month. The problem arises for those earning a higher wage.

For instance, if an executive makes $450,000 and becomes disabled, they receive $120,000 or only 27% of their income, not 60% as others in the plan would.

The problem for the employer now becomes a reverse discrimination issue. With an enhanced supplemental disability plan, employees earning a higher wage can receive a 60% replacement of their earnings. This ensures both financial stability and a greater sense of equity.

Life insurance plans

Employers can offer life insurance as an executive benefit through two approaches: qualified plans and non-qualified plans.

Qualified plans allow employers to categorize employees into specific classes, ensuring consistent benefits for those within a group. For instance, all executives and senior leadership can be grouped into one class, receiving the same outlined perks. These benefits must be clearly defined and uniformly applied to all within the class.

Nonqualified plans, on the other hand, provide more flexibility. Employers can tailor benefits to different tiers of leadership, providing customized perks for higher-level executives. This approach is particularly effective for retaining top talent.

The bottom line

Whether your company is looking to attract top-tier leadership, retain your current team, or stay competitive, executive benefits are an essential tool in today’s workplace. Through enhanced disability plans, life insurance options, and other customized perks, employers can create a comprehensive benefit package.

To learn more about custom executive benefit solutions to elevate your organization, reach out to a trusted advisor.