Your ExitMap Blog Contributor
Exit Planning Articles by John F. Dini, CBEC, CExP, CEPA

NQDCs – Funding and Forfeiture

 In our article on March 20th, we discussed Non-Qualified Deferred Compensation (NQDC) plans as a tool to compensate key employees for achieving long-term goals. One component of such plans is the fact that they are frequently unfunded and legally considered an unsecured promise to pay. Nonetheless, both plan sponsors and recipients often want a funding mechanism to set aside assets, manage cash flow, or hedge the liability. In addition, employers typically want conditions under which they can rescind the plan for cause, including failure to achieve the objectives the plan was designed to incentivize. Funding Mechanisms For cash-based plans, there are four common ways to ... Read more

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Business Ownership Isn’t What It Used to Be

If you’ve been a business owner for a long time, you’ve lived this shift firsthand. Many Baby Boomer owners started out alone—just an idea, a customer, and a willingness to take a risk. Hiring that first employee was a milestone. Now, years later, some of those same businesses employ dozens or even hundreds of people. And every one of those people comes with rights, protections, and obligations that ultimately land on you. As a business grows, so does the owner’s exposure—to legal risk, regulatory risk, financial risk, and reputational risk. Ownership doesn’t just mean opportunity anymore; it means responsibility layered on responsibility. Why Fewer People ... Read more

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NQDCs – “Let Me Count the Ways”

 Non-Qualified Deferred Compensation (NQDC) plans are a powerful tool for incentivizing and retaining key employees. They offer virtually unlimited flexibility in methodologies, objectives and rewards to suit a company’s strategies and goals. What is “unqualified?” Quite simply, NQDCs are discriminatory. Some owners shy away from that term, but discrimination isn’t automatically illegal. Illegal discrimination in the workplace is when an employer or manager treats an employee unfairly due to their race, color, religion, sex, national origin, age (40 or older), disability, or genetic information.  Non-qualified plans discriminate because they aren’t offered to everyone. The Employee Retirement Income Security Act (ERISA) sets standards for employee benefits. Retirement ... Read more

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Manufacturer Stuck in the “Neutral Zone”

 Here is how exit planning helped a business owner out of the Neutral Zone. This manufacturer reached out to an exit planning consultant after receiving a book on planning as a gift from a local professional. He was in no particular hurry to leave his business. In the preceding twenty years of ownership, he had grown it from a local vendor to home builders into a nationally known specialty house. The company provided him with a good living, generating roughly $700,000 a year in free cash flow for each of the previous five years. He wanted to continue for at least a few more years ... Read more

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How Much does the Big Picture Count?

 It is currently difficult to have a business conversation without discussing the Big Picture. The voracious 24-hour news cycle needs plenty of fodder to attract eyeballs. It almost seems like the media must pick and choose what will create the most concern. “Seventeen dead in drone attacks? Let’s put that sixth on the schedule.” Big Picture Issues Wars in Ukraine, Israel, and Sudan. Attacks on shipping. Russian hacker ransomware. The battle between the U.S. executive and judicial branches. Tariffs, sanctions, inflation, interest rates, boycotts. Will the price of raw materials go up? How much will transportation cost next week? Should I load up on inventory—or ... Read more

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