How to lock in your key employees with a vested bonus arrangement.
Before you offer another “good guy bonus” (I’m a good guy, you’re a good guy, we had a good year, here is a bonus), consider an arrangement where you put tax-deductible money into a plan for your key executives and if they leave your employment, they have to pay you back.
The essential elements of The Golden Handcuff Plan™ include:
- Identify which employees you want to lock in with golden handcuffs.
- Decide how much money to want to commit to the plan.
- Set the length of the vesting period to conform with your goals.
- Consider revising key employee non-compete agreements at the same time.
- Note this strategy works well in conjunction with a management buy-out plan.
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