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Designing your executive pay plan can be daunting—you need to consider a whole host of factors, such as the company's goals and the competitive environment. Let's take a look at some design considerations for effective executive pay plans.
One of the first things that comes to mind when figuring out how much to pay someone in an executive role is either conducting or purchasing a market study. However, there are several other things that must be completed first.
Designing your executive pay plan can be daunting—you need to consider a whole host of factors, such as the company’s goals and the competitive environment. Let’s take a look at some design considerations for effective executive pay plans.
Tax Consequences of Bonuses Bonuses paid in consideration for services rendered are almost always taxable wages subject to income tax withholding, FICA, and FUTA. These include production, incentive, and nondeferred profit sharing bonuses. The Internal Revenue Service has also ruled that bonuses paid to employees for signing or ratifying an employment contract are considered wages […]
Bonuses are an integral part of many companies’ compensation packages because they: Are an expression of goodwill from employer to employee. Exemplify a personal touch and may evoke loyalty and dedication. Allow organizations to manage pay for performance Can be used as an incentive to retain top performers or to attract new employees Allow the […]
In a BLR webinar titled “Smart Compensation Strategies for Small Employers: How to Maximize Your Budget and Reduce Legal Risks,” David J. Wudyka outlined some tips on implementing effective incentive plans. Why Implement an Incentive Plan? Incentive plans can be an effective part of a company’s compensation strategy. However, it is important to analyze whether […]
What’s Different About “Small Business”? When it comes to running compensation, small business have several challenges, says Wudyka, who is managing principal of Westminster Associates in Wrentham, Massachusetts. His tips came during a recent webinar sponsored by BLR. Small businesses, he says: Need “flexibility.” Small businesses need flexibility in anything they do when it comes […]