Travel$ense User's Guide (PDF, 139 MB) - NBAA

166TRAVEL$ENSEfactors vary by industry and by company within an industry, as do wages andsalaries. Values of employees even tend to vary substantially within the ranks ofan individual company. Economic studies on the subject have been mostlygeneral in nature, providing macroeconomics values for the overall economy ora specific industry. 11 Other economic data, analyses and studies have focused onspecific classes of employees or management for a total industry, such asproduction workers, or an overall company. 12The latter primarily concerns the reporting and disclosure of wages andsalaries, except for the Securities and Exchange Commission requirement forreporting total corporate compensation for officers of a company. Othereconomic studies, such as the average values of time derived for all airtravelers, relate primarily to the total universe of air travelers’ income asopposed to value or worth.The values of senior executives of a company may be measured by the valuesinsurance companies are willing to underwrite against the risks of business lifeinsurance policies for the company’s key management personnel as discussedbelow.Service organizations, such as accounting firms, law firms, consulting firms andengineering firms, have the most standardized approaches for valuing theirprofessional time using a multiplier of salary approach. Multipliers normally usedby these service organizations vary directly with the skills, expertise and statusof the employee.The factors that typically have been used to determine the value of anemployee to a company include the following:• annual wages or salaries of the employees,• cost of fringe benefits of the employees,• bonuses and other short-term incentive compensation,• long term incentive or contractual compensations,• other contractual costs, including employment protective provisions,• operating costs of the direct area of responsibilities,• allocated overhead of the area of responsibilities,• profits of the direct area of responsibilities,11 Op. Cit., Freeman, R.B., and Todd, J.D.12 See: Bureau of Labor Statistics, Employment and Earnings, (Monthly); Aerospace Industries Association ofAmerica, Aerospace Facts and Figures, (Annual); Securities & Exchange Commission Regulations onreporting requirements.Copyright © 1999, National Business Aviation Association, Inc.