You have talented employees and they are driving your business. Let us help you compensate your best employees. Offer them an incentive to differentiate you from your competitors.If you NEED to:Retain key employeesFurther engage those employees in the businessA simple, flexible planAn income tax deduction (who doesn't?)And your STATUS looks like this:Currently offering a 401KAs key employee’s salary increases, they are hitting the maximum contribution capInterested in more?Read on... Offer An Executive Bonus Plan (aka Section 162 Bonus Plan) An executive bonus plan is a raise in pay that you give your key people by depositing money into life insurance policies insuring them. Potential benefits for your businessYou select who gets to participateProvide additional financial incentives to retain employeeEnsure continued employment with the executive bonus agreementYour premiums are tax deductiblePotential Benefits for your key employeesThey can invest more for retirementTheir earnings grow tax-deferredThey can leave an income tax-free death benefit to their beneficiariesThey own and control the policy ConsiderationsThe premiums are taxed as ordinary income to the employee, unless you cover the tax.The premiums must be considered reasonable compensation when added to all other compensation for the employee.The business can deduct the premiums as an expense.The executive bonus agreement can include vesting, repayment and withdrawal restrictions to encourage employee retention.The employee must be insurable. Example: Aaron owns a landscape company. His top landscape designer, Kathy is key to the company’s sales and growth.The challenge:Aaron wants another way to reward KathyHe also wants to give her a good reason to stay with the businessThe solution:Aaron offers Kathy an executive bonus plan with a $25,000 premium invested annually to help supplement Kathy’s retirementKathy’s total annual bonus amount is actually $35,714 to cover the additional taxes and keep her net pay the same as before the bonusAaron’s business receives a deduction for the bonus paidAaron includes a restrictive endorsement and a bonus repayment agreement with a five-year vesting schedule to keep Kathy around.As you review this hypothetical example, please note that it is not intended to represent any specific person or situation. The assumptions we’ve used are for illustrative purposes, and actual results will vary.Contact us below for a free consultation to review your current retirement plan: Set Up a Free Consultation with Rodd! You May Like...Our site is filled with educational videos, articles, and slideshows designed to help you learn more. As you search our site, send me a note regarding any questions you may have about any particular investment concepts or products. We'll get back to you quickly with a thoughtful answer. Directors and Officers Liability InsuranceNot only can D&O insurance provide financial protection, but it can help improve an organization’s decision-making.