From tariffs to cash flows, small business owners may feel that mid-2025 warrants attention to how key employees are compensated and retained. Formula-based bonuses may need refinement. It may also be timely to consider change-in-control retention incentives, as well as equity-based incentives. And perhaps improved trade secret and non-competition protections. From an executive compensation perspective, a wholistic approach is generally best.
There is a toolkit for pretty much any business situation and objective that a small business faces. As a general matter, pure takeaways (such as reduced bonus opportunities) are usually best coupled with a new benefit – such as phantom stock that pays out on a change in control or after some period of future employment. Such a benefit preserves cash in the short term, while providing incentives that motivate.
Each member of Wagner Law’s executive compensation team has decades of experience that involve hearing business needs and suggesting efficient alternatives. Here is a link to a PowerPoint Presentation that we used for a webinar a few years ago. It’s outline remains timely, and we would be glad to customize it for a call or presentation for any client or friend that desires assistance during these high stakes times.
Mark Poerio has been in private practice with a focus on executive compensation, employee benefits (especially ESOPs), and retirement plan fiduciary matters, not only from a tax and labor perspective, but also from a business, governance, tax, securities, and litigation perspective.
