Page 260 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

246 The Complete Guide to Executive Compensation

their house and provide meals and housekeeping services. The next stage is providing this
service in a shared living facility, sometimes called an independent living facility. In the third
stage, for those still healthy enough to live on their own, meals and social events are provided
in common areas. The fourth stage is full nursing service for those unable to perform one or
more daily activities. Ideally, the person is able to translate smoothly from one service to
another without moving. This benefit is discussed later in the home health-care section.
The need for childcare has been heightened by the dramatic increase in the number of
working women and single-parent families. The benefit ranges from a simple referral service
where recommended providers are located to a company facility (childcare) to various financial
support programs or permiting children to come to work with the parents (or without) in an
on-site facility. An executive perk might be a nanny provided at company expense. If financial
support is provided, the company must be aware of perceived inequity by other employees.
Namely, some employees are getting a benefit others are not receiving. Some have incorporated
these programs into their flexible benefits programs, which will be discussed later in this
chapter. Sections 21 and 129 of the IRC should be useful when reviewing these programs.
Executive importance ranges from low to high, depending on spouse and dependent status.

Dues and Memberships
Reimbursement ranges from airline clubs to professional organizations. The first provides a
quiet workplace while traveling, the second provides access to resources that will facilitate
professional development. Because of low cost, such reimbursement is probably of moderate
interest to an executive.
Educational Assistance

For employees interested in additional education, some form of educational assistance is usu-
ally available. Such a program might pay 75 percent or more of tuition and related expenses.
The percentage reimbursed may be based on grade: 60 percent for a C, 80 percent for a B,
and 100 percent for an A. For the executive, this benefit could be combined with a fully paid
sabbatical for a year to obtain an MBA or complete a Ph.D. Sometimes special programs
are established in conjunction with preretirement counseling programs to encourage the
individual to adopt new interests. Section 127 of the IRC prescribes the requirements and tax
treatment for educational assistance programs. See also the section on “Scholarships” in this
chapter. Importance of this benefit to executives is moderate at best.

Employee Assistance Programs
Employee assistance programs (EAPs) began by focusing on problems of substance abuse
(alcohol and drugs) but have been expanded to cover virtually any problem troubling an
employee, ranging from family responsibilities to marketplace issues. In addition to doing a
good deed by providing such services, companies believe that productivity is negatively
affected when issues trouble employees. EAPs are intended to help. Services range from
referrals to actively meeting with and trying to help the employee with his or her problem.
The service may be provided on or off site. An important issue is confidentiality. If employees
do not believe privacy will be respected, they are unlikely to use the service. In addition to
chemical dependency and family issues, executives may find EAPs of value in addressing work
stress, ranging from burnout to work load to job insecurity and, therefore, of moderate