Page 239 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)
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Chapter 6
Employee Benefits
and Perquisites
INTRODUCTION
his chapter combines two compensation elements—employee benefits and
T perquisites—since executives participate in both. Perquisites (perks for short)
begin where employee benefits leave off and for that reason the two are
combined in this chapter.
Importance by Type of Company
Like the salary element described in Chapter 4, the importance of employee benefits and
perquisites in the compensation package depends on whether the company is nonprofit or
for-profit, publicly held or privately held. This is illustrated in Table 6-1 and Table 6-2. The
relatively higher importance of employee benefits and perquisites for not-for-profit compa-
nies is caused by restrictions on use of incentive pay. Thus, employee benefits and perquisites
have to pick up some of the slack.
Eligibility
Employee benefit eligibility typically applies to all full-time and part-time employees. However,
eligibility for perquisites is very selective. Typically, it is the most exclusive of the five pay
elements and applies only to executives as defined in Chapter 1. Key position, salary, job grade,
title, reporting relationship, or some combination of these can define an “executive.”
Employee Benefits vs. Perquisites
The employee benefits element deals with providing time off with pay, service programs, health
care, survivor protection, and retirement coverage to all employees in the organization. The
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