Executive Bonus Plans for Business Owners

Tax Advantaged Plans for Key Employees – Starting with the Business Owner

Who are the “Key Employees” in a Business?

  • Owner(s)
  • Experienced Managers
  • Employees Who Are Critical to the Success of the Business and Would be Difficult to Replace

How Does the Business Owner Benefit from Executive Bonus Plans?

  • Allows the Owner(s) to Reap the Rewards of Success
  • Helps the Business to Attract and Retain Top People
  • Properly Structured Executive Bonus Plans are Tax Advantaged
    • Tax Free Growth
    • Tax Free Income / Withdrawals *
  • Executive Bonus Plans Can Be Aligned With Company Goals
    • A Vesting Schedule Can Be Used to Incentivize Key Employees to Stay With the Company
    • Executive Bonus Plans Can be Tied to Company and/or Individual Performance
    • Executive Bonus Plans Allow the Company to Provide Benefits that Are Similar to Incentive Stock Options at Large Public Companies
  • Executive Bonus Plans Are Flexible
    • Plans Can Be Structured Differently for Each Key Employee
    • Executive Bonus Plans are Not Subject to the Restrictions Found in 401(k) Plans

How Does the (Non-Owner) Employee Benefit from Executive Bonus Plans?

  • Bonus Potential – Key Employees Can Share in Company Profits
  • Tax Advantaged Retirement Plan – Provides the Employee a Company Funded Retirement Plan
    • Tax Free Growth
    • Tax Free Income / Withdrawals *

* Tax Free Distribution or Income are based on the use of partial surrenders and zero or low-cost loans and policy structured within the MEC guidelines with the policy remaining in force!  Kelm Financial Services Inc. does not provide legal advice nor tax calculations, preparation or advice. Consult with a licensed professional in that field for additional information.