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When advisors recount war stories — the times when they won or lost the lucrative deal — the factor that proved crucial often was not their selling skills, financial expertise or the innovativeness of the plan. The key, rather, was their gaining access to the parties that counted: the men and woman at the top.

“Whether a company adopts a plan with us is a function of our building strong relationships with the decision-makers,” says Herb Daroff, a partner at Baystate Financial Partners, Boston, Mass. “In the past, we might have made recommendations the company liked. But because we didn’t develop those relationships, somebody else — maybe the controller’s brother-in-law — got the business.”

Adds Kevin Rex, a principal at Summit Financial, Parsippany: “If you can’t get past the gatekeepers to the decision-makers, chances are you’ll end up spinning your wheels and doing work for nothing.”

Who hold the levers of power over the executive benefits plan? Sources interviewed by National Underwriter agree that at most small businesses — typically firms with fewer than 100 employees — the CEO and/or president will almost always have the final say. But depending on the firm’s size, structure, corporate culture and political clout of individual employees, other players will provide input, even if they don’t vote on the plan.

Among them: the chief financial officer; human resources or benefits director; accountant, controller and/or treasury officer; and attorney. At larger companies, more people who function in one of these or a related capacity may also have a say.

Daroff notes that he’s drafting a plan involving 29 participants at a firm with approximately 400 employees. C. Haines, a chief marketing and sales officer at Cbiz/Benmark, Atlanta, Ga., says the firm’s clients, all community banks, almost always seek approval from their boards of directors.

Success in selling the executive benefits package hinges not only on identifying and securing access to the company’s top brass. Also crucial, observers say, is the ability to tailor presentations to their concerns.

H.R. reps, for example, tend to focus on incentives that will best secure plan objectives, including the so-called three R’s: recruit, retain and reward. CFOs, while, supporting these goals, also have to be mindful that plan costs can be supported without unduly impacting key measures of business performance. Two ratios that bear close scrutiny: executive compensation dollars as a percentage of company assets; and as a share of gross revenue.

CFOs, to be sure, aren’t the only ones eyeing the numbers. Outside parties — shareholders, financial analysts and at times, customers or suppliers — may also weigh in on the merits of an executive comp plan. Daroff cites one client, an architectural firm, which had to revise its plan after submitting financial statements to prospective customers as part of a bidding process on contracts.

“We’re revising the non-qualified plan from one based on a defined benefit to a less desirable defined contribution arrangement,” says Daroff. “You could try to explain [to prospective customers] the enhanced retention value of the better plan. But these are blind bids and the last thing they want is a verbal explanation to go with it.”

Corporate attorneys, for their part, want to ensure that plan recommendations don’t get so creative as to prompt an audit by the Internal Revenue Service. Nor do they want to see the plan made untenable in 3 or 5 years by new federal regulations.

“Companies have gotten hit time and again with IRS challenges,” says Joseph Maczuga, president of CPSI Group, Troy, Mich. “We’ve seen that happen most recently with equity split-dollar arrangements. The client wants to know that the plan can be sustained over the long-term.”

For companies crossing the line on new 409A restrictions, for example, that’s not in the offing. Prominent among the IRC rule’s provisions are guidelines on elections and distributions. For those execs who elect to defer compensation after Dec. 31, the election cannot take effect until 12 months after the election date; and the first payment must be deferred for not less than five years from the date such payment would otherwise have been made.

Michael Goldstein, president and general council of BenefitsGroupWorldwide, Los Angeles, says 409A will force many firms to amend, or entirely revamp, their executive compensation packages. And given the added complexity of nonqualified plans mandated by the rule — experts anticipate a proliferation of scheduled distribution accounts and “rolling” three- and five-year- distributions from plans that comprise multiple accounts — small businesses will increasingly place a premium on the ability to easily service their plans.

“Servicing is becoming a much bigger issue, almost as important as plan design,” says Haines. “Company execs want to know how the plan will be booked and administered, and how participants can access reports.”

Such access is not just for the benefit of company big-wigs. Increasingly, observers say, businesses are extending compensation packages and perks beyond the top-tier of corporate officers to key employees occupying a second rung.

A report on executive benefits published in 2004 by Clark Consulting, North Barrington, Ill., concludes that 33% of division/unit managers and 26% of highly compensated sales professionals polled (all employees of Fortune 1000 companies and large private companies) receive a non-qualified deferred compensation plan. These percentages compare with 87% of presidents, CEOs, and executive or senior vice presidents; 76% of vice presidents; and 39% of boards of directors.

Second-tier employees are securing other benefits. Of all unit managers and sales professionals surveyed, 13% and 14%, respectively, said they are eligible for a supplemental executive retirement plan (SERP); 21% of each category receives supplemental death benefits; and 18% of each enjoys supplemental disability benefits.

“We continue to see plans that err on the side of inclusiveness,” says Tom Chisholm, a senior managing director of the Executive Benefits Practice at Clark Consulting. “More organizations are looking at how to deliver supplemental benefits to managers beyond the top five or six people. This trend has been going on for some time.”

To be sure, the benefits of first- and second-tier executives aren’t always the same. And that can produce tensions. In some instances, first-tier officers enjoy greater stock ownership in the firm than their second-tier colleagues. Frequently, says Maczuga, officers don’t effectively communicate the costs of such benefits to their companies or the reasons for differences in benefits.

Such variations needn’t be a bad thing. Indeed, sources say, it’s not uncommon for firms to customize benefits for each executive. Frequently, that’s necessary because of the executive’s personal financial circumstances or “life cycle phase.”

First-tier officers who are in their 50s and 60s may be more focused on retirement, estate planning or long-term care needs. Middle managers in their 30s and 40s, by contrast, might lend greater weight to family considerations, such as pre-natal health care benefits or funding a child’s college education.

Observers additionally point out that a burgeoning number of small businesses are tying executive benefits to performance, both in terms of individual and collective metrics.

The 29 executives for whom Daroff established an executive benefits plan, for example, receive supplemental compensation based on a three-tier reward structure: the first determined by the executive’s contribution to the lab he or she manages; a second tied to the company’s growth; and a third, discretionary payout that recompenses individuals for personal effort, irrespective of the performance of the labs they manage.

Performance considerations aside, what packages and funding vehicles do small businesses favor in the current regulatory environment? Will 409A dampen enthusiasm for non-qualified deferred compensation plans?

Advisors think not, observing that governing IRC rules aim largely to trim plan design excesses. The Clark Consulting survey notes, in fact, that non-qualified, deferred comp plans and SERPs funded by corporate- or trust-owned life insurance remain the vehicles of choice among most businesses surveyed.

Daroff notes that IRC section 162 executive bonus plans remain popular among his small business clients, chiefly S corporations. Even equity-based split-dollar plans, which have largely fallen into disfavor under the current tax regime, can still prove advantageous if structured properly, according to Maczuga.

If anything, observers suggest, the current tax laws give advisors clearer rules to operate by. The rules favor, too, simplicity in the structuring of executive benefits.

Which brings us back to the decision-makers. For simplicity — in plan design, presentation, implementation and administration — ultimately may help decide whether the advisor wins the client’s business.

Says Rex: “More times than not, I’m brought in to simplify clients’ lives and take them to a new level of efficiency. They want a straightforward plan and a single point of contact for all their financial services needs.”

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“If you can’t get past the gatekeepers to the decision-makers, chances are you’ll end up spinning your wheels and doing work for nothing.”