What Are Executive Benefits?
Executive benefits are specially designed compensation and retirement strategies that go beyond the standard, broad-based plans every employee receives. Where a 401(k) or group insurance plan is built for the whole workforce, executive benefits are built for the small group of people who drive most of a company’s value — the owners, founders, and key leaders you cannot afford to lose. They let a business reward, retain, and retire its most important people on a selective, flexible basis that qualified plans simply do not allow.
Why Business Owners Need More Than a 401(k)
Qualified retirement plans come with strict limits. Contribution caps, nondiscrimination testing, and coverage rules are designed to spread benefits evenly across all employees — which is exactly the problem when you want to do something extra for a handful of key people. A high earner often finds that a 401(k) replaces only a fraction of their income in retirement, leaving a significant gap. Executive benefits exist to close that gap and to give owners a tool they fully control: who participates, how much, and on what terms.
The Real Problem: Keeping Your Best People
Your most valuable executives are also the most recruitable. Competitors know who they are, and a strong leader walking out the door can take clients, institutional knowledge, and momentum with them. The right executive benefit creates “golden handcuffs” — a meaningful, often vesting, financial reason for a key person to stay and keep building with you. Retention is not about paying more today; it is about designing a future reward that is hard to walk away from.
The Main Types of Executive Benefits
There is no single “best” executive benefit — the right answer depends on your entity type, your goals, and the people you are trying to reward. Here are the core strategies, each explained in depth on its own page:
Executive Bonus Plans (Section 162)
The simplest place to start. A Section 162 executive bonus plan uses tax-deductible employer dollars to fund a personally owned policy for a key executive — straightforward, flexible, and especially powerful for pass-through entities.
REBA — Restricted Executive Benefit Arrangements
A bonus plan with strings attached. The REBA blueprint adds a vesting schedule and a recovery feature, turning a simple bonus into true golden handcuffs your executives actually want.
Nonqualified Deferred Compensation (NQDC)
Let key people defer income beyond 401(k) limits and grow it tax-deferred. Our complete guide to NQDC covers how these plans are designed, funded, and secured — including the popular 401(k) Mirror Plan for restoring lost contribution room.
Split Dollar Life Insurance
A sophisticated way to share the cost and benefit of a life insurance policy between the company and the executive. Split dollar architecture can deliver substantial tax-efficient value when designed correctly.
Phantom Stock
Give key people the economic upside of ownership without handing over real equity. Phantom stock creates an ownership feel that aligns executives with long-term growth.
SERPs and Employer-Funded Plans
A Supplemental Executive Retirement Plan is a company promise to pay a defined future benefit — an employer-funded pension for your most important people.
BOLI and COLI Funding
Many executive benefits are funded efficiently with institutional life insurance. Bank Owned Life Insurance (BOLI) and Corporate Owned Life Insurance (COLI) let the asset on your balance sheet recover the cost of the benefits you provide.
Ownership Transition and Exit
When the goal is succession, an ESOP or a broader business succession plan turns your largest asset into a funded, tax-advantaged exit.
How to Choose the Right Executive Benefit
The right plan starts with your goals, not a product. Are you trying to retain one irreplaceable leader, reward a small leadership team, build your own retirement, or plan an exit? Your entity type matters too — what works beautifully for a pass-through may be structured differently for a C corporation. The strongest plans are reverse-engineered from the outcome you want, then funded in the most tax-efficient way available. That is the heart of what we call The Perfect Plan®.
Talk to a Specialist
Executive benefits reward your power to make decisions about who you keep and how you retire. If you want to explore which strategy fits your business, schedule a meeting with Schiff Executive Benefits and we’ll help you design a plan around your goals.