Exective Retention Plan

Hello:

I am Siddharth 'SID',a foreigner student in ATENEO Graduate School of Business, pursuing MBA.
As a partial requirement to complete Diploma I am conducting this Survey to know the need on EXECUTIVE RETENTION PLAN in PHILIPPINES.

Thanking your participation in this Survey I am glad to offer you two STARBUCKS Gift Certificate after successful completion.

Your participation in this study is completely voluntary. There are no foreseeable risks associated with this project. However, if you feel uncomfortable answering any questions, you can withdraw from the survey at any point. It is very important for us to learn your opinions.

Your survey responses will be stricly confidential and data from this research will be reported only in the aggregate. Your information will be coded and will remain confidential.

If you have questions at any time about the survey or the procedures, you may contact SID at 9209544955 or by email at the email address specified below.

Thank you very much for your time and support. Please start with the survey now by clicking on the Continue button below.

1. Do you have key executives and high potentials in the company that affect the company’s performance greatly?

YES

2. Do you think it is important to have retention plans for your key executives and high potentials?

YES

3. Do you have any retention plan for your key executives and high potentials?

YES

4. If yes, what kind of retention program? (Choose all that is applicable)

Deferred compensation i.e. keep 25% of his monthly salary and pay them when he stays in the company for 5 years

Stock option

Bonus plan i.e. giving cash bonus or investment in the employee’s behalf

High salary

Benefits i.e. insurances

5. If no, do you want to have a retention plan for your key executives and high potentials?

YES

6. Which retention plan you think is the most effective?

Deferred compensation i.e. keep 25% of his monthly salary and pay them when he stays in the company for 5 years

Stock option

Bonus plan i.e. giving cash bonus or investment in the employee’s behalf

High salary

Benefits i.e. insurances

7. When designing a retention plan, is it a:

fixed retention plan where you are the only one who design the retention plan

flexible retention plan where you discuss together with the key executive in designing the retention plan

9. We have a product concept: Group Executive Retention Plan (GERP)
PLease Read it.

The GERP is similar to the cash deferred compensation.let say the key executive is entitled to a $100,000 cash bonus in year 1. Instead of giving him the cash in year 1, you deferred the paying to your executive to year 5 with expectation that the executive will stay in the company until year 5.
If he exits the company before year 5, depending on the agreement, he will not receive the bonus at all, or he might receive partial bonus.

Instead of allocating the funds for the cash payment to the executive, you purchase the GERP on your key executive worth $100,000 in one-paid premium.
Depending on the agreement, the GERP will have a cash value at every year, for example $102,000 in year one, $104,000 in year two and so on.
Assume that the insurance matures in 5 years; your company will get cash value of $110,000. Your executive will receive $107,000 net of tax (assuming the tax rate of 30%).

The benefits of GERP compared to the standard cash deferred compensation plan:

interest on your invested cash,

tax shield,

life insurance coverage on the executive with the company as the beneficiary,

possibility to purchase of multiple plans,

cash value at every period.

After reading the explanation, do you think the product has a sound business value to you?

YES

Are you interested to have the GERP?

YES

Please contact [email protected] if you have any questions regarding this survey.