Executive Benefits Benchmarking

Benefits benchmarking strategies, hard data comparisons, retirement income replacement ratios.

Does your organization benchmark compensation, while overlooking the quantifiable value of executive benefits? Plans may seem comparable on the surface, but when you examine the facts, differences can be substantial …and consequential.


Executive Benchmarking Benefits

Human capital, key talent, executive leadership … attracting and retaining the best of the best is essential to ensure an organization’s success in any industry or profession. Executive compensation committees, human resources executives, c-suite and other upper management typically focus on current compensation to attract and keep top talent. Yet even those who have the most to lose, may overlook the measurable significance of executive benefits as part of their own total rewards. The question is simple, “What are benefits, if not a critical component of compensation?”
Know where you and your organization stand:
  • Overlooking the value of executive benefits in the total compensation package is a fragmented approach to executive benefit benchmarking
  • Plans may seem comparable and the disparities between two plans seem minor, until you scrutinize the hard numbers
  • Not having an executive benefit and rewards strategy, by default, is your strategy
Fulcrum Partners offers analytics for measuring benefits and benefit outcomes as an integrated part of retirement income, comparing total compensation for peer groups, analyzing retirement contributions, and providing insights on all executive benefits and perquisites.

You vs. Your Peers

The public data is out there. In most cases, it’s in proxy statements, plan document filings, and annual reports. As an executive, you don’t have to guess how your benefit plan compares with the plans of your peers. Nor should compensation committees or board members have any doubts about how the organization’s plans equate in the short- and long-term to those of competitive companies or how retirement contributions fit into total rewards. Let Fulcrum Partners show you how executive compensation at your organization compares with that of others in your peer group. For executives at smaller or privately-held companies, where peer group data may not be as readily available, benchmarking benefits against best practices is an effective and enlightening strategy.
Companies have a Statement of Investment Policy for a 401(k) plan. Why wouldn’t they likewise commit to a Statement of Retirement Strategy?
  • What are your benefits relative to those of your peers?
  • What is the Retirement Income Replacement Ratio (RIRR) for the Named Executive Officers (NEOs); the top five highest paid employees in your company) and the core executive population?
  • What should the RIRR be at your company? In other words, what is your retirement strategy within total rewards?
The executive benefit consultants at Fulcrum Partners can help you and your organization answer these questions and confidently know exactly how your plans compare with those of your peer group competitors.

Retirement Income Replacement Ratios//RIRR

Retirement Compensation in Summary: CEO

This chart shows real data for a sampling of twelve companies, all within the same industry. Company contributions appear as a percentage of the CEO’s salary, to all qualified and nonqualified retirement plans. As you see, six companies appear to have incorporated retirement into total rewards and six companies appear to offer only a 401(k) match or a 409(A) match or restoration. rirr chart 07 28 17 1
Career Retirement Benefit (RIRR): CEO

This chart shows the annual lifetime income replacement, as a percentage of Total Cash Compensation (salary plus bonus), created by company contributions to all retirement plans, assuming the company meets target performance. RIRR is based on current plan design, age, and year of service. It is a life annuity expressed as a percentage of total cash compensation projected at age 65. rirr chart 07 28 17 2