Case Study #3

How do I retain key employees who are critical to my business?


I’m Tim, age 60, and I have built a successful environmental engineering company with more than 50 employees. My only partner is semi-retired, so I now “wear many hats.” My time and energy are stretched thin, at a phase in life when I would like to wind down. Fortunately, I have two key employees with whom I share the load – Chief Financial Officer Melinda, age 39, and Chief Engineer Doug, age 43


My BSG professional helped me identify various financial risks that I face, but had not addressed. Among these was the realization that I could lose Melinda and Doug, my company’s most valuable human assets, to a catastrophe or to a competitor.

My BSG professional asked me two key questions:

  1. If I lost either key employee, what financial impact would it have on the company and on me?
  2. What provisions have I made for tying Melinda and Doug to the company long-term?

BSG Strategy

Tim’s BSG professional facilitated him and his other trusted advisors to take the following decisive actions: 1) Tim’s company acquired key person life and disability income insurance on Melinda and Doug to mitigate the financial impact – lost revenues and the cost of recruiting and training their replacement – should Tim lose either of these key employees, permanently or temporarily; 2) the BSG professional arranged for a “productivity and motivations analysis” on Melinda and Doug, so Tim could better incent them to act as “owners” of the business; and 3) Tim adopted executive benefits packages that would act as “golden handcuffs” to tie Melinda and Doug to the firm long-term. This was an executive bonus plan for Melinda, which over time, would help her fund her number one priority: her children’s education. For Doug, who is taking care of his kids’ education by foregoing his own retirement savings, it’s a non-qualified deferred compensation plan, to potentially enhance his retirement income. For both employees, there are now more compelling reasons to stay with the firm for the long-term.

© 2012 AXA Advisors, LLC. All rights reserved.
GE-115677c (8/16)(Exp 8/18)

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