Achieving your mission is not possible without the right leadership. As leaders, you can lay out a compelling vision and foster a culture that encourages and motivates people to action. Culture alone, however, is not enough. To attract—and keep—the highest performers, you need to assemble a total compensation package that addresses both short-term and long-term needs for income.
Short-term compensation—the base salary and bonus—help fuel today’s lifestyle. It’s important to benchmark those regularly, and there’s a best practice for doing that; that is a subject for another article. Only relying on current cash compensation, however, is risky as there’s always a bigger checkbook elsewhere. Every employee, especially an executive, needs to plan for the day when their current income ends (retirement). Including elements of long-term compensation helps both retain and reward your key people.
These elements are generally referred to as executive benefits.
Beware of executive benefits solutions presented without analysis and discussion in your first meeting with a provider, however. The best practice is to first do a “retirement income analysis” or RIA to determine what, if any, shortfall exists in current benefit programs. (A deep dive into an RIA is for another article!) Only after you pinpoint the amount of an executive benefit should you then consider what form of benefit to provide.
There are three general forms of executive benefits, each with advantages and disadvantages. Here are examples of how three IZALE clients implemented benefits that work for them.