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Executive Benefits Firm Raises $12 Million

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NU Online News Service, April 23, 6:52 p.m. – The Todd Organization Inc., a large, Greensboro, N.C., executive benefits consulting firm, says it has raised $12 million to pay for research, recruit new sales people and improve its training programs.

The privately held firm borrowed $5 million and generated the rest by selling stock to individuals affiliated with the company.

Today, The Todd Organization is clearly one of the top five independent players in the “non-qualified” executive benefits market, according to Mel Todd, the company’s president.

But “the needs of the marketplace are changing,” Todd says.

Companies that fail to invest for the future will have trouble competing, Todd predicts.

The Todd Organization was founded in 1957 by John Todd, who, oddly enough, is not related to Mel Todd. The company sets up and helps administer large bonus programs; deferred compensation programs; corporate-owned life insurance plans; retirement plans too rich to qualify for the usual retirement savings tax breaks; and other high-end benefit programs.

The Todd Organization now has more than 700 corporate clients and 10 regional offices.

In a recent financial filing, Clark/Bardes Holdings Inc., Barrington, Ill., a large, public benefits consulting firm, lists The Todd Organization as one of its top four competitors in the executive benefits market, along with Newport Group Inc., Heathrow, Fla.; TBG Financial & Insurance Services Corp., Los Angeles; and the Management Compensation Group consortium.

These days, executive benefits problems are more complicated than they used to be, and firms need to make better use of the Internet and wireless communications, Mel Todd says.

Clark/Bardes demonstrated one way to raise cash in August 1998, by bringing in $36 million with a public stock offering. Clark/Bardes has been in the headlines with one acquisition announcement after another ever since.

The Todd Organization prefers to remain privately held and avoid the quarter-to-quarter earnings comparison pressure that faces public companies, Mel Todd says.

“We have a long-term focus on the business,” Todd says.

The company also has a long-term focus on hiring.

The company now has 20 full-time sales representatives. Todd would like to see that number increased to 50 over the next five years.

The new reps must be able to communicate well with corporate boards and high-level executives. The ideal candidates are seasoned insurance producers who have already developed strong relationships with small business owners and would like to move up to the next level, Todd says.