Growing BusinessBENEFITS

Compensating Key Employees


The most valuable assets of just about any growing business are its key employees. Compensating them properly—rewarding and motivating key people—is critical to the ongoing success of your business. But how can you afford to do that when the business is young and money is tight?

Go beyond salary. Compensation can come in a variety of forms. In addition to salary, consider a bonus plan, deferred compensation plan, and/or supplemental insurance

How Much Should You Pay Yourself?

In setting your salary, you need to straddle the line between receiving adequate compensation and keeping the business financially healthy.

  • How much salary? How much non-salary compensation?
  • Should you give yourself a raise?
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How to Structure a Bonus Plan

An executive bonus plan can do double duty, providing compensation and a form of performance incentive and reward for key employees.

  • Base it on clear objectives
  • Think about shares as a reward
  • Consider a life insurance policy
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Should You Offer a Deferred Compensation Plan?

Deferred compensation can be a great way to help retain your most valuable employees without breaking your current budget.

  • May take the form of non-qualified deferred compensation
  • Powerful, flexible tool
  • Can be set up to produce retirement income
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4 Types of Supplemental Insurance Plans

These can include a wide range of insurance coverage. They are tax deductible for your business and excludible from your key employees’ income.

  • Health insurance
  • Long-term care
  • Disability insurance
  • Life insurance
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