Imagine designing what you think to be a high-quality home, only to discover it wasn’t constructed to withstand a storm.
That’s the reality behind many executive compensation benefit plans: they may seem thoughtfully conceived on the surface, with a well-crafted mix of salary, bonuses and equity. But dig a little deeper, and you’ll often find that the benefits designed to protect those earnings—disability coverage, life insurance, and retirement programs—prove to be structural vulnerabilities that too often remain unseen until tested.
And by the time they’re tested, it’s usually too late to fix them.
Companies devote considerable resources, time and money designing effective executive compensation packages. However, the supporting benefits—disability, life insurance, retirement—often receive less attention, despite being critical to preserving both income and long-term financial security. The very programs meant to support high earners’ asset accumulation and protection against income loss and financial instability often fail to scale with the size and structure of their success.
Even the most polished compensation strategy can conceal flaws beneath the surface. For highly compensated employees, those flaws often take shape in three areas:
These shortcomings, each significant on their own, together are amplified. They can destabilize the financial foundation executives have worked hard to build.
Picture a high earner who becomes disabled. Their Group LTD may kick in, but it only replaces a limited percentage of their earnings. They’re not just losing a paycheck; they’re often only getting a portion of their base salary and none of their bonus or equity. On top of that, they lose the ability to fund retirement accounts. In a single moment, two underpinnings—current income and future financial security—are compromised. Should the life-altering disability result in death, the family may be left with minimal life insurance coverage, far below what’s needed to maintain financial stability.
The illusion of sufficient coverage disappears quickly in these moments. These benefits are more than individual safety nets—they are interconnected supports holding up a much larger structure. If one fails, the impact is often compounded by the others.
Building a better house or in this case—a stronger benefits foundation—starts by viewing these programs through the lens of today’s high earners. That means applying the same rigor and customization to benefits as is given to compensation design. There’s no universal solution, but there are common upgrades worth exploring: