Executive planning is the process of laying out a strategic order in which top employees should carry out their duties and the benefits they are likely to get in order to achieve maximum benefits in a company. Every corporate should not lack executive planning as it is a vital component for benefit strategies. Proper executive planning motivates executives and also ensures that they have a drive to focus on the success of the business. If the plan does not offer a better incentive of a package as compared to what the competition gives then it is likely to fail.
Executive planning provides flexibility in the development of strategies concerning benefit compensation which can be used for many purposes. It enables the provision of replacement income at retirement based on total compensation. It makes it possible to attract, reward and retain key executives of the organization. It also provides enhanced benefits in the event of an acquisition or change of control.
The three key types of executive plans are the supplemental executive retirement plans, equalization plans and deferred compensation arrangements. Benefit equalization plans are plans that help to restore lost retirement plans. In order to avoid current taxation, deferred compensation arrangements allow both designated executives and corporate directors to defer additional compensation. These plans are made to make it possible for key employees to have vehicles provided by the business. A large number of benefits are provided by the supplemental executive retirement plans. 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. It makes it possible for executives who retire at an early age to acquire retirement benefits.
When laying out an executive plan, there are factors that every organization must put into consideration. Cost objectives and benefits of the business should be taken into consideration. Every organization should consider its approach towards the allocation of benefits based on the overall performance of the company. To top it all, the organization should also check how it wants to distribute its retirement benefits among various qualified plans.
Attracting and maintaining of key personnel is important for any business and this is enabled by executive planning that is greatly thought out. Appealing incentives for primary executives and succession of the business when the time is right, is brought about by an effective executive planning. It also helps an organization to plan for its current and future needs and its executive leadership.
For every organization to succeed, it should ensure that it has efficient executive planning.