The Key to Working with Senior Executives: Understand Corporate Plans

Coffman, Brett A.
October 2003
Journal of Financial Planning;Oct2003, Vol. 16 Issue 10, p62
Academic Journal
This article provides an overview of the most common corporate plans that Fortune 1000 senior executives participate in, planning opportunities, what to look for in corporate plan documents and how the data can be organized most effectively. The executive matrix is a framework for concisely organizing the most critical client corporate data about how corporate plans operate. Determining the amount of incentive bonus an executive receives is critical because it directly affects the extent to which many corporate plans are funded. These plans allow the executive to elect to purchase company shares with a percentage of short-term bonuses, often referred to as purchase shares. A set number of shares are granted to the executive with an exercise data. The executive can defer salary and bonuses. A planning opportunity exists in making sure both pre-tax contributions and company match are maximized. This plan is completely funded by the employer and, during 2003, is subject to an earnings limit of $2,000,000, indexed in $5,000 increments. Tax-deferred plans have individual beneficiary election forms, which are a critical part of estate planning. When looking at the executive's overall asset allocation, consider the value of the pension.


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