The process of strategizing the way executives should carry out their duties is called executive planning. It is a very important component for all benefit strategies of any corporate. The success of a business is brought about by proper executive planning as it gives them a drive to focus and also motivates them. An organization or a business may suffer losses or fail if the plan does not offer the incentive of a package as compared to what the competition offers.
Executive planning provides flexibility in the development of strategies concerning benefit compensation which can be used for many purposes. Replacement income at retirement is able to be provided based on total compensation. It makes it possible to attract, reward and retain key executives of the organization. It makes it possible to provide enhanced benefits in case of a complete change of power in the business.
There are three key types of executive plans namely: deferred compensation arrangements, benefit equalization plans and supplemental executive retirement plans. Lost retirement plans are restored by benefit equalization plans. Deferred compensation arrangements on the other hand allow corporate directors and designated executives to defer additional compensation so as to avoid current taxation. These plans are strategized in order to make it possible for key employees to acquire vehicles provided by the business. Supplemental executive retirement plans provide numerous benefits. Provision of credit for service years added is made possible. The rewarding of top employees by the organization based on their overall performance is made possible. It makes it possible for primary executives to get bonuses. Executives who retire early are also able to get retirement benefits and this is made possible by this plans.
Before an organization can design an executive plan it should consider some factors. A business is supposed to put into consideration both the aims of the cost and its benefits. In addition to that, every company should consider its attitude towards allocating benefits based on an overall company performance. To top it all, the organization should also check how it wants to distribute its retirement benefits among various qualified plans.
In order to succeed, every business should have a well thought out executive planning since it enables the organization to maintain and attract key personnel. Effective executive planning will also offer appealing incentives for key executives and allow for succession of the business at the right time. It also helps an organization to plan for its current and future needs and its executive leadership.
It is upon every organization therefore to ensure that it has effective executive planning so as to enhance the success of the business.