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FMA of NH May 19, 2009

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FMA of NH May 19, 2009

  1. 2. Our Annual Sponsors:
  2. 3. Cementing Key Employee Relationships in Difficult Economic Times May 19, 2009
  3. 4. Presenters: <ul><li>William White General Counsel Thomas Brady & Associates </li></ul><ul><li>Robin Schell Senior Counsel & Partner Jackson, Jackson & Wagner </li></ul>
  4. 5. Goal: Cementing Key-Person Relationships… Now is the time to refine compensation plans : … Secure Deductions…Create Incentives…Reduce Costs… Non Deductible Deductible More Admin Costs Less Admin Costs <ul><li>Deferred Compensation Plans ( § 409A) </li></ul><ul><li>Deferred Bonus Plans ( § 409A) </li></ul><ul><li>Phantom Stock Plans ( § 409A) </li></ul><ul><li>More costly to set up, maintain and monitor. Subject to ERISA </li></ul><ul><li>Subject to Rights of Company Creditors </li></ul><ul><li>Employer Owns the Asset(s) that fund the plan </li></ul><ul><li>Can only cover Highly Compensated Key-People </li></ul><ul><li>Restricted Bonus Plans ( § 162) </li></ul><ul><li>Incentive Bonus Plans ( § 162) </li></ul><ul><li>Group Life ( § 79) </li></ul><ul><li>Less costly to set up, maintain and monitor. Minimum ERISA coverage </li></ul><ul><li>Not Subject to Rights of Company Creditors </li></ul><ul><li>Employee Owns the Asset(s) that funds the plan </li></ul><ul><li>Can cover all Key-People </li></ul>
  5. 6. <ul><li>Restricted/Incentive Bonus Plans ( § 162) </li></ul>Group Life ( § 79) <ul><li>All employees receive $50,000 of group term life coverage tax </li></ul><ul><li>free: </li></ul><ul><li>Employee simply elects in </li></ul><ul><li>Deductible? YES </li></ul><ul><li>Taxable? NO </li></ul><ul><li>FICA/FUTA? YES </li></ul><ul><li>Key Employees receive permanent (cash value) life Coverage tax preferred: </li></ul><ul><li>Key Employee simply routes premium of any existing policy (or new policy) through the § 79 Plan </li></ul><ul><li>Deductible? YES </li></ul><ul><li>Taxable? PARTIALLY </li></ul><ul><li>FICA/FUTA? YES </li></ul><ul><li>Key Employees Under $106,500:Employer makes deductible, incentive-based bonus into a Restricted: </li></ul><ul><li>Investment Account </li></ul><ul><li>Life Insurance Policy or </li></ul><ul><li>Annuity </li></ul><ul><li>-Employee owns the account </li></ul><ul><li>-To avoid FICA/FUTA on the Bonus the Acct must be (i) Restricted until Death and (ii) Be in Life or Annuity Policy </li></ul><ul><li>Deductible? YES </li></ul><ul><li>Taxable? YES </li></ul><ul><li>FICA/FUTA? NO </li></ul><ul><li>Key Employees Over $106,500: Employer makes deductible, incentive-based bonus into a Restricted: </li></ul><ul><li>Investment Account </li></ul><ul><li>Life Insurance Policy or </li></ul><ul><li>Annuity </li></ul><ul><li>-Key Employee owns the account </li></ul><ul><li>-Account may be restricted until benchmarks or years of service are met </li></ul><ul><li>-Restriction is optional </li></ul><ul><li>Deductible? YES </li></ul><ul><li>Taxable? YES </li></ul><ul><li>FICA/FUTA N/A </li></ul>
  6. 7. Cementing Key Employee Relationships In Difficult Economic Times Presented By: Robin Schell, APR, Fellow PRSA Jackson Jackson & Wagner
  7. 8. Why Communicate With/ Motivate Employees? <ul><li>Most credible sources of information </li></ul><ul><li>Most important resources to achieve competitive advantage </li></ul><ul><li>Fear of not knowing is worse than knowing the bad news </li></ul>
  8. 9. Understanding Environment in Which They/(Us) are Living <ul><li>Lack of information & understanding </li></ul><ul><li>Bad news! (Stock Market, Layoffs etc.) </li></ul><ul><li>Media sensationalizes </li></ul><ul><li>Advanced technology & 24/7 news environment </li></ul><ul><li>Leaders don’t have all the answers </li></ul><ul><li>Expectations of transparent communication </li></ul><ul><li>Turf protection vs. support </li></ul>
  9. 10. Research First <ul><li>How do we find out what employees are thinking, feeling, doing? </li></ul><ul><ul><li>Formal and Informal Research </li></ul></ul><ul><ul><li>Word-of-mouth/Grapevine/Social Media </li></ul></ul><ul><ul><li>Behavior: do they stay or do they go? </li></ul></ul>
  10. 11. High Anxiety, Concerns , Fear Low Anxiety, Concerns, Fear <ul><li>Strategy: </li></ul><ul><li>High Touch </li></ul><ul><li>Secure and Hold </li></ul><ul><li>Isolate and Solve </li></ul><ul><li>Management as communicator </li></ul><ul><li>Objectives Focus </li></ul><ul><li>Tactics: </li></ul><ul><li>Face-to-Face </li></ul><ul><li>One-on-ones </li></ul><ul><li>Education: financial, stress mgmt </li></ul><ul><li>Cheerleading w/o spin </li></ul><ul><li>Small steps on critical goals </li></ul><ul><li>Customer Service Strategies </li></ul><ul><li>Employee Action/Role (ambassadors) </li></ul><ul><li>Message Strategies </li></ul><ul><li>Reality w/o fear – calming </li></ul><ul><li>Transparency </li></ul><ul><li>Education </li></ul><ul><li>Strategy: </li></ul><ul><li>Traditional but continuous comm. </li></ul><ul><li>Monitor and respond </li></ul><ul><li>Isolate and Solve </li></ul><ul><li>Supervisor as Communicator </li></ul><ul><li>Goal focus </li></ul><ul><li>Tactics: </li></ul><ul><li>No new methods but increase frequency </li></ul><ul><li>Research – dipstick, opinion leaders </li></ul><ul><li>Workshops: financial, stress mgmt, </li></ul><ul><li>MBWA senior management </li></ul><ul><li>Goals that contribute to bottom line (energy savings, customer service) </li></ul><ul><li>Employee Action/Role (ambassadors) </li></ul><ul><li>Message Strategy: </li></ul><ul><li>What makes a difference </li></ul><ul><li>Reinforce what is going right </li></ul><ul><li>Productivity & performance </li></ul><ul><li>Role of employee as ambassador </li></ul>Economic Crisis Communication Strategy
  11. 12. Examples of What’s Being Done Now <ul><li>Actions Speak Louder: Cutting Expenses Before Jobs </li></ul><ul><li>-- Starbucks CEO salary drop, $1.2 million to under $10,000/yr. </li></ul><ul><li>-- Motorola’s freeze on pension plans/401K matches (plus CEO salary cuts) </li></ul><ul><li>-- Fed-Ex base salary cuts for CEO & senior execs </li></ul><ul><li>“ Invertising”: internal buzz-building campaigns </li></ul><ul><li>-- PepsiCo, Coke </li></ul><ul><li>-- Make sure internal & external messages are consistent! </li></ul>
  12. 13. Examples of What’s Being Done Now <ul><li>Stay true to organizational values </li></ul><ul><li>-- IBM: 1 st line manager communication; severance; 1 st dibs on internal openings </li></ul><ul><li>Engage employees in selling the organization </li></ul><ul><li>-- HFHS: employee referral program </li></ul><ul><li>COMMUNICATE…COMMUNICATE…COMMUNICATE! </li></ul>
  13. 14. Employees As Ambassadors <ul><li>5% Hand-picked </li></ul><ul><li>10% Self-Selects </li></ul><ul><li>85% Everyone Else </li></ul>
  14. 15. Employees As Ambassadors <ul><li>Place employees on Boards </li></ul><ul><li>Develop a proactive speaker’s bureau </li></ul><ul><li>“Message of the Month” </li></ul><ul><li>Engage them in a social responsibility project: original or with partner organizations </li></ul>
  15. 16. Employees As Ambassadors <ul><li>10 Most “Frequently Asked Questions” </li></ul><ul><li>Feedback Systems – What are they hearing out there? </li></ul><ul><li>Goal-driven programs (e.g. Referral Program) </li></ul>
  16. 17. Top 9 Recommendations <ul><li>Be a transparent organization </li></ul><ul><li>Educate so they understand! </li></ul><ul><li>Set goals – connect personal w/organizational </li></ul><ul><li>Involve and engage all levels of employees… make it part of the culture! </li></ul><ul><li>Spotlight the role models </li></ul><ul><li>Train your spokespersons </li></ul><ul><li>Support everyone in the company – no turfing! </li></ul><ul><li>Coach the visionary for the organization </li></ul><ul><li>Communicate, communicate, communicate </li></ul>
  17. 19. Please mark your calendars for our next meeting! September 15, 2009
  18. 20. For More Information, Contact Our Speakers: <ul><li>Thomas Brady & Associates </li></ul><ul><li>http://www.tbradyandassociates.com/ </li></ul><ul><li>William White, General Counsel (617) 266-0019 </li></ul><ul><li>Jackson Jackson & Wagner </li></ul><ul><li>www.jjwpr.com </li></ul><ul><li>Robin Schell, APR, Fellow PRSA </li></ul><ul><li>(603) 770-3607 </li></ul>

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