Coverage
Executive Benefits
Attract, retain, and reward your organization's senior leadership with executive benefit strategies that go beyond standard group plans. ALKEME designs customized programs that align executive interests with business performance.
The challenge
Qualified plans cap out well below what senior people need, so the executives you most want to keep are the ones whose benefits quietly stop working.
How ALKEME solves it
We design supplemental arrangements around the handful of people they are meant to hold — deferred compensation, executive disability, carve-out medical — and structure the vesting so retention is the point rather than a side effect.
Built per executive, not bought as a package.
What Executive Benefits Cover
Executive benefits encompass a range of supplemental arrangements that extend beyond the benefits available to the general employee population. Nonqualified deferred compensation (NQDC) plans allow executives to defer salary, bonuses, or other compensation beyond qualified plan limits, with earnings growing tax-deferred until distribution. These plans can be structured as salary deferral, employer contribution, or combination arrangements, with investment options that mirror or differ from the qualified plan menu.
Supplemental executive retirement plans (SERPs) provide targeted retirement income benefits to key executives, often designed to replace a specific percentage of final average compensation when combined with Social Security and qualified plan benefits. Executive bonus plans (IRC Section 162) allow the company to pay premiums on individually owned life insurance policies for selected executives, with the premium reported as taxable compensation to the executive. Split-dollar life insurance arrangements share the cost and benefit of a life insurance policy between the employer and the executive. Key person insurance protects the organization against the financial impact of losing a critical leader.
Who Needs Executive Benefits
Executive benefits are essential for any organization that relies on the leadership, expertise, and relationships of senior executives. In competitive industries, standard benefits packages may not be sufficient to attract C-suite candidates and senior vice presidents who have offers from multiple organizations. Executive benefit programs create the so-called golden handcuffs that incentivize top talent to remain with the organization over the long term.
Privately held companies and professional practices often use executive benefits to provide equitable retirement benefits to owner-operators and key partners whose qualified plan contributions are restricted by nondiscrimination testing. Family businesses transitioning to the next generation may use executive benefits as part of succession planning, rewarding non-family executives who are critical to the transition while preserving equity for family members. Public companies use executive benefits to complement equity-based compensation with cash-based arrangements that are less dilutive to shareholders. ALKEME tailors executive benefit strategies to the specific talent challenges and business objectives of each client organization.
Why Executive Benefits Matter
The total cost of executive turnover, including recruitment fees, onboarding time, lost institutional knowledge, and disrupted client relationships, can exceed two to three times the executive's annual compensation. Executive benefits serve as a strategic retention tool by creating deferred financial incentives that vest over time or upon specific milestones such as continued service, company performance targets, or completion of a strategic initiative.
From a tax planning perspective, nonqualified deferred compensation allows executives to time income recognition in years when their marginal tax rate may be lower, such as post-retirement. Employer contributions to NQDC plans are not tax-deductible until the executive recognizes the income, but the deferred compensation liability does not count toward qualified plan nondiscrimination tests, giving the employer flexibility to provide meaningful additional benefits. ALKEME models the after-tax value of executive benefit alternatives, incorporating IRC Section 409A timing requirements, constructive receipt rules, and the substantial risk of forfeiture provisions necessary to achieve the desired tax deferral.
Key Features of ALKEME's Executive Benefits Consulting
- ●Nonqualified deferred compensation plan design including salary deferral, employer match, and discretionary contribution structures
- ●SERP design and informal funding strategies using corporate-owned life insurance (COLI) or rabbi trusts
- ●IRC Section 409A compliance review covering election timing, distribution events, and documentary requirements
- ●Executive bonus (Section 162) and restricted bonus plan design for individually owned life insurance
- ●Split-dollar life insurance arrangement structuring under economic benefit and loan regime regulations
- ●Key person insurance needs analysis and business valuation support
- ●Golden parachute and change-in-control provisions with IRC Section 280G excise tax modeling
- ●Compensation committee advisory support and peer group benchmarking for executive total rewards
Frequently Asked Questions
Industries That Need This Coverage
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