Section 162 Executive Bonus Plans:
A Guide for Employers & Retention
Section 162 Executive Bonus Plans:
A Guide for Employers & Retention
Section 162 Executive Bonus Plans
Executive Bonus Plans (Section 162):
The "Golden Handcuffs" Strategy
Executive Bonus Plans (Section 162):
The "Golden Handcuffs" Strategy
What is a Section 162 Executive Bonus Plan?
What is a Section 162 Executive Bonus Plan?
A Section 162 Executive Bonus Plan is a non-qualified strategy where a company pays the premium on a life insurance policy owned by a key executive. The company deducts the the premium as a business expense (compensation), and the executive gains a portable, tax-advantaged asset.
A Section 162 Executive Bonus Plan is a non-qualified strategy where a company pays the premium on a life insurance policy owned by a key executive. The company deducts the the premium as a business expense (compensation), and the executive gains a portable, tax-advantaged asset.
Why Top Companies Use "Golden Handcuffs"
Instead of Just Cash
Why Top Companies Use "Golden Handcuffs"
Instead of Just Cash
High-performing CFO's and VP's are constantly being recruited. A standard cash bonus is taxed immediately and spent immediately - leaving now lasting loyalty.
A Section 162 plan solved the retention problem by turning compensation into a long-term asset. It allows you to offer this benefit ONLY to the key people you cannot afford to lose, unlike a 401(k).
High-performing CFO's and VP's are constantly being recruited. A standard cash bonus is taxed immediately and spent immediately - leaving now lasting loyalty.
A Section 162 plan solved the retention problem by turning compensation into a long-term asset. It allows you to offer this benefit ONLY to the key people you cannot afford to lose, unlike a 401(k).
Arthur Zapesochny
President, Cross-Practice Insurance
Arthur Zapesochny
President, Cross-Practice Insurance