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 *