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Executive Benefit Planning for Privately Held Companies: Case Studies

"Studies indicate that more than 20% of the workforce owns stock in its employer through stock options, restricted stock plans, ESOPs, stock purchase plans, or in a 401(k) plan. However, for many privately-held companies these plans may not be practical because of the current ownership structure, governance issues, or the cost of regulatory requirements. Some form of phantom equity arrangement may be more effective in meeting the shareholders objectives[.]"

2025 Tax Law Changes: New Executive Compensation Rules for Nonprofits and Public Companies

"For nonprofits, the 21% excise tax on executive compensation over $1 million has been dramatically expanded from applying to only the top 5 highest-paid employees to all current or former employees earning over $1 million. For public companies, the expansion of Section 162(m) deduction limitations creates new incentives to adopt nonqualified deferred compensation (NQDC) plans as tax-efficient compensation strategies."

Winning Top Talent in Privately Held Businesses with Phantom Equity Plans

"While many owners of privately held businesses ... want to encourage key employees to 'think like shareholders,' they are reluctant to (or simply cannot) grant true equity interests to key employees.... [T]he answer for those privately held businesses that do offer an LTIP is a 'phantom' or 'synthetic' equity arrangement such as a Phantom Stock or Stock Appreciation Rights Plan. While each of these plan structures has certain advantages in specific situations, EBS has found the Performance Units Plan (PUP) format to be most flexible and effective in encouraging key employees to think and act like shareholders."

Performance Units Plan (PUP) Case Study

"How can a successful family-owned business reward and retain key employees who drive company value -- without giving up ownership or control? This was the challenge facing a thriving power generation company as ownership transitioned to its third generation.... This case study demonstrates how a properly structured Performance Units Plan can solve complex compensation challenges while protecting company interests."

Unfavorable Accounting Changes Expected for Post-Retirement Split-Dollar Plans (PDF)

1 page. Excerpt: Earlier this year, the Emerging Issues Task Force ..., an administrative arm of the Financial Accounting Standards Board ..., undertook an initiative to review and clarify the accounting for endorsement split dollar arrangements that contain a post-retirement benefit. On June 15th, after an in-depth discussion of split dollar life insurance, the EITF concluded that the deferred compensation and post-retirement benefit aspects of a split dollar plan constitute a benefit[.]

How to Defer and Diversify RSUs

Video with summary outline. "Evolution of stock compensation plan design ... Loss over control of the timing of taxation ... Regaining control over the timing of taxation ... Advantage of tax deferral upon vesting of RSUs ... Diversification of RSUs deferred ... Considerations and risk of deferring RSUs."

ACA-ERISA Lawsuit Risks Likely to Continue Until Congress Acts Despite Trump Executive Order for Agencies to Issue Relief

"While the Agencies may possess the authority to lessen the burden of compliance with the regulatory mandates of the ACA by revising regulations, issuing enforcement relief or other certain other actions, these powers do not extend to blocking the authority of participants and beneficiaries to bring suit to enforce the provision of the ACA that the ACA added to ERISA through private benefit denial or breach of fiduciary duty lawsuits brought under ERISA."

2018 ERISA Advisory Council Recommendations to DOL: Executive Summary (PDF)

"Evaluating the Department's Regulations and Guidance on ERISA Bonding Requirements and Exploring Reform Considerations: The Council recommends that the Department publish the following new guidance ... [1] A new Interpretive Bulletin, incorporating much of the content of its 2008 Field Assistance Bulletin 2008-04. [2] A summary of the requirements for securing a fidelity bond that complies with the Department's guidance.... "Lifetime Income Solutions as a Qualified Default Investment Alternative (QDIA): [1] Amend the QDIA regulations to address using [lifetime income (LTI)] in a QDIA.... [2] The Department should publish guidance confirming that a named plan fiduciary may appoint a 3(38) investment manager to select and monitor annuity and other LTI options for DC plan decumulation, as well as accumulation.... [3] The Department should encourage plan sponsors to adopt plan design features that facilitate LTI, including, but not limited to: allowing participants to take ad hoc distributions, enabling installment payments, providing Social Security bridge options and allowing for payment of required minimum distributions."

Putting Telehealth to Work

"90% of employers reported they will provide telehealth benefits in states where they can this year. Yet ... of the employees who had access to telehealth services in 2016, only 3% used the benefit.... Employers need a well-executed and consistent communication strategy promoting the benefit that will educate employees about the existence and process for using telehealth services and to address any barriers to utilization. This strategy will help employees' knowledge and trust in the benefits that telehealth services offer."

Voluntary Benefits Trends to Help Employers in War for Talent

"Holistic wellness solutions take front and center role ... Executive benefits are a winning play for senior talent ... Data analytics guide benefits strategy and design."