Executive Benefits Survey Results of the 2011 ... - Hay Group

Executive Benefi ts Survey 

Results of the 2011 Executive Retirement 

Benefi ts & Perquisites Survey 

www.haygroup.com

2 Executive Benefits Survey 

Contents 

Introduction 3 

Executive retirement plans 3 

Nonqualified deferred compensation programs 6 

Executive perquisite prevalence 8 

Executive benefits in the future 9 

Participant statistics 10 

Survey participants 12 

© 2011 Hay Group. All rights reserved. www.haygroup.com


Introduction 

In July and August 2011, Hay Group conducted a survey of executive retirement benefits and 

perquisites. Our primary objective was to obtain current data on the prevalence of practice 

regarding executive retirement, deferred compensation and perquisites for employers of all 

sizes and across a broad group of industries. Since we last conducted a survey on executive 

benefits more than 5 years ago, the struggling national and global economies, declining 

share prices and expanded proxy disclosures have created an intense public focus on 

executive benefits. This environment is causing boards of both for profit and not for profit 

organizations to focus more on the level and composition of executive benefit programs. 

Boards also want to structure their programs in a market-competitive manner that serves 

shareholders’ and/or public interests. 

An electronic survey questionnaire was made available to employees in a position to provide 

information on their companies’ executive benefits policies. Hay Group tabulated and sorted 

the results from 317 responding employers with median revenue of nearly $1billion. 16% of 

the respondents are tax exempt organizations. 

Executive Retirement Plans 

Nearly half of the participating organizations provide some type of nonqualified retirement 

plan, either defined benefit or defined contribution (refer to the bottom of this page for 

definitions). The table below shows not only the overall prevalence, but also the eligibility by 

executive group. 

Executive Retirement Offered 

President & 

CEO 

Executive 

and Senior 

VPs 

© 2011 Hay Group. All rights reserved. www.haygroup.com 

VPs 

Division 

Heads 

Based on 

Compensation 

Nonqualified Retirement Plan 49% 66% 57% 42% 17% 32% 

Defined Benefit 32% 74% 69% 49% 26% 35% 

Defined Contribution 31% 73% 72% 60% 37% 39% 

Of those organizations that provide this type of benefit, one third provide both a defined 

benefit and defined contribution plan, while the remaining two thirds provide only one type of 

nonqualified retirement plan. 

The trend away from defined benefit plans continues, in both qualified and nonqualified 

arrangements. The data may suggest that organizations with both a DB and DC 

arrangements have grandfathered executives into the DB program and offer a DC program 

to new executives. 

Nonqualified 

Retirement 

Plan 

Nonqualified 

Defined 

Benefit Plan 

Nonqualified 

Defined 

Contribution 

Plan 

Executive Retirement Plan Definitions 

Supplemental executive retirement plans (SERP), such as top-hat plans or excess plans, which 

provide certain employees with additional retirement benefits. These plans may be free-standing 

plans that cover several executives or they may be part of individual executive employment 

contracts. 

Retirement plan that provides a fixed benefit at retirement based on a formula or target income 

percentage. The plan is not qualified under the Internal Revenue Code (IRC) and is usually in 

addition to a qualified defined benefit plan. This type of plan is designed to supplement defined 

benefit pensions and/or restore benefits in pension plans that are limited by ERISA. 

Retirement plan in which employers make fixed contributions toward retirement. The plan is not 

qualified under the IRC and is typically in addition to qualified defined contribution plans (401(k), 

403(b), etc.) This type of plan is designed to supplement defined contribution plans and/or restore 

benefits that are limited by ERISA.


Prevalence of executive retirement plans differs by industry as the graph below illustrates. 

Percent 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

Executive Retirement Plan Prevalence by Industry 

59% 

50% 

Industrial Consumer 

Goods 

47% 45% 

© 2011 Hay Group. All rights reserved. www.haygroup.com 

32% 

20% 

Health Care Financial Tax Exempt Services 

Industry 

Organizations have a variety of reasons for providing a nonqualified retirement plan, as the 

table below shows. 

Executive Retirement 

Plan 

Objective 

President 

& CEO 

Executive and 

Senior VPs 

VPs 

Division 

Heads 

Based on 

Compensation 

Make up for IRS Limits 74% 77% 71% 55% 32% 38% 

Bring retirement income to a target 

level 

33% 87% 71% 44% 23% 15% 

Include deferred compensation 32% 90% 80% 72% 38% 30% 

Provide "golden handcuffs" to retain 

executives 

32% 82% 80% 45% 22% 16% 

Recruit mid-career executives 26% 73% 78% 59% 32% 24% 

Improve early retirement benefits 12% 79% 74% 47% 26% 26% 

Include bonuses not covered in 

qualified plans 

12% 79% 63% 42% 16% 21% 

Provide benefits for executives with 

insufficient service 

8% 75% 67% 42% 17% 17% 

Provide retirement benefits to 

executives with no qualifed plan 

8% 77% 85% 31% 8% 8% 

Maintain benefits from executive's 

prior employer 

6% 78% 67% 33% 22% 33% 

"Keep whole" executive transferring 

from subsidiaries or other countries 

3% 75% 75% 50% 50% 25%


DEFINITION OF PAY 

The definition of pay in nonqualified retirement plans is most typically base salary plus 

annual incentives. 

Elements of Pay Included 

Base Salary 92% 

Annual Incentives 75% 

Long-term Incentives 18% 

Deferred Compensation 41% 

52% of organizations with a nonqualified retirement plan have some type of funding in place. 

Vehicle used to fund or secure plan 

Rabbi trust 72% 

Life insurance 23% 

Other 11% 

Paid out in cash each year without gross-up for taxes 7% 

Severance plan 4% 

Paid out in cash each year with gross-up for taxes 2% 

Secular trust 1% 

Not-for-profit stock option plan 1% 

Definitions 

Rabbi Trust A trust created for the purpose of supporting the non-qualified benefit obligations of employers to 

their employees. These trusts are sometimes referred to as "grantor trusts". Called a Rabbi trust 

due to the first initial ruling made by the IRS on behalf of a synagogue, these forms of trusts create 

security for employees because the assets within the trust are typically outside the control of the 

employers and are irrevocable. 

Secular Trust A variation of the irrevocable Rabbi trust arrangement used with a nonqualified deferred 

compensation plan. Because the assets in a secular trust are not subject to the claims of creditors, 

it offers an executive more security than a Rabbi trust. 



Nonqualified Deferred Compensation Programs 

This section details the findings of voluntary deferred compensation programs, which may or 

may not have an employer contribution. Prevalence of deferred compensation programs is 

53%, slightly higher than nonqualified retirement plans. Prevalence is also higher at lower 

executive levels. 

Do you offer a nonqualified deferred 

compensation plan to executives? 

Yes 53% 

No 39% 

Considering 5% 

Not Considering 3% 

Who is eligible for the plan? 

President & CEO 71% 

Executive and Sr. VPs 71% 

VPs 63% 

Division Heads 43% 

Based on compensation 43% 

Code Section 409A imposed strict requirements regarding deferral elections, timing of 

payments and acceleration of payments on nonqualified deferred compensation 

arrangements. The impact of 409A may account for the relatively static prevalence of these 

types of arrangements. In addition, the restrictions placed on deferral elections and payment 

timing may have diminished the attractiveness of these types of programs. Participation in 

NQDC programs is on average 39%. 

The elements of compensation that are eligible to be deferred under NQDC programs are as 

follows: 

What Type of Compensation is Eligible to be Deferred? 

Base 89% 

STI 79% 

LTI - Cash 25% 

LTI - Stock 9% 

Restricted Stock 7% 

Just over one third of organizations are making company contributions to their deferred 

compensation programs. 

Do you match deferrals? 

Yes 36% 

No 64% 



Separation from service, death and disability top the list of criteria for payment of benefits, 

while lump sum payments and annual instalments are the most prevalent payment type. 

What are the criteria for payment of benefits under the 

What are the payment options under the NQDC 

NQDC plan? 

plan? 

Separation of Service 90% Lump Sum 94% 

Death 84% Fixed Annual Installments 62% 

Disability 70% Single or J&S Annuity 10% 

Change of Control 48% Monthly Installments 10% 

Specified Period of Time 45% Other 7% 

Hardship 43% 


The most prevalent basis for crediting interest to participant accounts was found in the 

“other” category, as more than half the respondents in this category indicated that 

participants earn a rate of return based on their selected investments. Nearly all of the 

remaining respondents in this category mirror the return of the 401(k) plan funds, as elected 

by the participant. 

What is the basis for interest crediting on NQDC deferrals? 

Participant Directed Investments 30% 

Stock Index 20% 

Mirror 401(k) Plan Investments 17% 

Bond Index 16% 

Fixed Rate 13% 

Treasury Note 11% 

Prime Rate 11% 

Company Stock 11% 


With regard to funding, 54% of organizations have some type of funding arrangement in 

place for their NQDC program. 

Is the NQDC plan funded? 

Informally funded 54% 

Unfunded 44% 

Considering 2% 

What vehicles are used to fund the NQDC? 

Rabbi trust 69% 

Life insurance 30% 


Paid out in cash each year without gross-up for taxes 8% 

Secular trust 2% 

Not-for-profit stock option plan 0% 

Severance plan 0% 



Executive Perquisite Prevalence 

The following perquisites are the most prevalent: 

� Cell phones / Blackberry 

� Company Car / Car Allowance 

� Severance Pay 

� Employment Contracts 

Perquisites that show increased prevalence from prior surveys are Executive Physical 

Examinations and Executive Coaching. 

Perquisites that have decreased in prevalence include Executive Medical Reimbursement 

and Country Club Memberships. Although still prevalent, Employment Contracts have also 

decreased in prevalence. 

Executive Perquisites Offered 

President & 

CEO 

Executive and 

Senior VPs 

VPs 

Based on 

Division Heads 

Compensation 

Cellular Phones 79% 94% 87% 83% 67% 9% 

Exec Severance Pay Practice 51% 87% 80% 58% 29% 8% 

Employment Contracts 48% 19% 55% 23% 13% 8% 

Exec Physical Exams 43% 96% 85% 55% 20% 4% 

Golden Parachutes 42% 92% 83% 31% 13% 7% 

Exec Parking 39% 95% 83% 56% 27% 1% 

Exec Group Life Insurance 37% 88% 80% 57% 22% 10% 

Exec LTD 37% 84% 80% 60% 26% 22% 

Car Allowance 36% 78% 71% 56% 34% 4% 

Average Car Allowance Amount $11,988 $10,921 $10,376 $11,187 $7,667 

Personal Financial Counseling/Tax Prep 31% 95% 82% 40% 19% 6% 

Company Cars 30% 93% 57% 38% 24% 4% 

Home Office Equipment 29% 93% 66% 57% 29% 2% 

Exec Vacation Policy 28% 92% 84% 75% 33% 6% 

Executive Coaching 26% 92% 80% 52% 29% 5% 

Country Club Membership 24% 94% 51% 27% 9% 8% 

Company Aircraft - Personal Use 18% 95% 41% 10% 7% 2% 

Key Person Life Insurance 18% 93% 56% 36% 15% 11% 

Event Tickets or Boxes 16% 92% 71% 55% 35% 10% 

Post-Emp Consulting Agreement 15% 63% 67% 41% 28% 15% 

Airline Club Membership 15% 93% 67% 41% 20% 4% 

Athletic/Fitness Club Membership 14% 93% 75% 64% 34% 11% 

Exec Medical Reimbursements 13% 93% 79% 50% 24% 5% 

Paid Spouse Travel Expenses 13% 93% 56% 20% 7% 5% 

Luncheon Membership 13% 93% 65% 30% 13% 8% 

Excess Personal Liability Insurance 11% 89% 83% 60% 29% 6% 

Exec Retiree Medical 10% 91% 81% 59% 47% 6% 

Chaffeur 10% 90% 27% 10% 3% 7% 

Home Security 9% 89% 41% 11% 7% 7% 

Apartments/Houses/Suites 8% 71% 50% 13% 4% 4% 

Split Dollar Insurance 5% 73% 80% 53% 33% 13% 

Exec Dining Room 4% 86% 64% 50% 36% 14% 

Personal Legal Services 4% 92% 83% 67% 42% 8% 

Sabbatical Leave 3% 88% 88% 88% 75% 13% 

Dependent College Tuition 3% 63% 63% 63% 50% 25% 

Executive Flex Plan 3% 88% 75% 75% 50% 25% 

Average Executive Flex Plan Amount $24,800 $13,500 $6,750 $3,250 $6,000 

With regard to tax gross ups of executive perquisites, 82% of respondents do NOT gross up 

any perquisites for tax purposes. Within the 18% of organizations that do gross up 

perquisites, car allowance is the most commonly grossed up perquisite. 



Executive Benefits in the Future 

Most organizations are not planning to change their current executive retirement and 

perquisite programs. 

Are you expecting to make changes to your executive 

benefits program in the near future? 

Executive Deferred 

Retirement Compensation Perquisites 

Yes 9% 15% 9% 

No 91% 85% 91% 

Install 10% 17% 7% 

Improve 34% 41% 37% 

Cut Back 24% 7% 30% 

If you have any questions about this survey, or would like more specific information, 

please contact your Hay Group consultant or Malinda Riley (312.228.1822). 



Participant statistics 

Data from 317 companies is included in this survey summary. Survey participants came 

from many industries, with consumer goods, industrial and financial organizations 

representing the majority of the group. 

2011 Executive Benefit Survey 

Survey Partipants by Industry 

Financial, 19% 

Consumer Goods, 16% 

Health Care 

7% 

Survey participants by ownership status 

Industrial, 27% 

Services, 22% 

317 total participants 

Of the 317 respondents, 16% are tax exempt organizations (public sector or not for profit). 



Survey participants by annual revenues 

Nearly one half of the participating companies have annual revenues of at least $1 billion. 

$5B - $9.9B, 7% 

$2.50 B - $5B, 11% 

2011 Executive Benefit Survey 

Survey Partipants by Revenue 

$20B or greater, 

8% 

$10B - 

$19.9B, 5% 

$1 Billion - $2.49B, 17% 

$500M - $999M, 9% 


Survey participants (317)* 

CONSUMER GOODS (52) 

Ace Hardware 

Advance Auto Parts 

Art Van Furniture 

Bunge 

Cabelas 

Cargill, Incorporated 

Carlson Restaurants 

Coca-Cola Bottling Co. Consolidated 

Collective Brands, Inc. 

ConAgra Foods, Inc. 

Dollar General Corp 

Dr Pepper Snapple Group 

DSW Inc. 

Finish Line 

Flexi Compras Corp 

Fossil 

Gap Inc. 

Haggar Clothing Co. 

Hallmark Cards, Inc. 

Helzberg Diamonds 

Kao Brands Company 

La-Z-Boy Incorporated 

Limited Brands, Inc. 

Limited Stores, LLC 

Lowe's Companies, Inc. 

MillerCoors 

Nordstrom 

Oxford Industries Inc 

PepsiCo 

Pier 1 Imports 

PVH Corp. 

Russian Standard Vodka USA, Inc. 

Sears Holdings Corporation 

Shopko Stores 

Sonic Automotive, Inc. 

Sports Authority 

Stage Stores Inc. 

Staples Future 

Talbots, Inc. 

Target Corporation 

The Finish Line, Inc. 

The Pampered Chef 

The Pantry Inc 

The TJX Companies, Inc. 

Tiffany & Co. 

Toyota Motor Sales, U.S.A., Inc 

Toys "R" Us 

Tupperware Brands Corporation 

Tyson Foods, Inc. 

ULTA Beauty 

Zale Corporation 

ZF Group NAO 

FINANCIAL (61) 

Alfa Mutual Insurance Company 

Arkansas Blue Cross Blue Shield 

Associated Bank 

Babson Capital Management LLC 

Blue Cross and Blue Shield of Kansas 

Blue Cross Blue Shield of Michigan 

Blue Cross Blue Shield of NE 

Blue Cross Blue Shield of North Dakota 

Boston Mutual Life Ins. Co. 

Broadridge Financial Solutions 

Capital One 

CareFirst BCBS 

Chemung Canal Trust Company 

Citizens Financial Bank 

Colonial Properties Trust 

CUNA Mutual Group 

Delta Dental of Kansas 

Discover Financial Services 

Equifax Inc. 

FHNC 

Fiducial Support Systems, Inc 

First Citizens Bank 

Florida Business Development Corporation 

Fox Chase Bank 

FWCJUA 

ICW Group 

Island Holdings, Inc. 

IWIF 

Kansas City Life Insurance Company 

Lansing Trade Group, LLC 

Legg Mason 

MidCountry Financial Corp 

Missouri Employers Mutual 

Montana State Fund 

Munich American Reassurance Company 

Mutual of Omaha Insurance Co 

OneBeacon Insurance 

Penn National Insurance 

Pinnacol Assurance 

Protective Life Corporation 

Regency Centers 

RenaissanceRe 

Ruane Associates Inc 

San Antonio Credit Union 

Securian Financial Group 

State Street Corporation 

Texas Mutual Insurance Company 

The Ayco Co LP 

The Bostonian Group 

The Glenmede Trust Company 

The PMI Group, Inc. 

The Principal Financial Group 

The Providence Mutual Fire Insurance Company 

TMNA Services, LLC 

UMB Bank 

UMD 

United Fire Group 

US Federal Credit Union 

Washington Real Estate Inv. Trust 


WMayer & Associates 

Workforce Safety & Insurance of ND 

GOVERNMENT (11) 

Bexar County 

City of Anaheim 

City of El Paso 

City of St. Charles 

DFW International Airport 

Indian Prairie School District 204 

Jackson County 

Metropolitan Washington Airports Authority 

Minnesota Department of Human Services 

North Texas Tollway Authority 

Town of Greenwich, Municipal Gov’t 

HEALTH CARE (20) 

American Dietetic Association 

Beloit Health System 

Burnett Medical Center 

CIGNA 

CRF Health 

Daiichi Sankyo, Inc. 

Emblem Health 

Endo Pharmaceuticals 

H. Lee Moffitt Cancer Center 

Hope Network 

Hospira, Inc. 

Johnson & Johnson 

Octapharma Plasma 

Pfizer 

Santen Inc. 

Signature Healthcare 

Southwest General Health Center 

The Osborn 

The Visiting Nurse Association of Texas 

Woods Services 

INDUSTRIAL (84) 

Americas Styrenics 

AOC, LLC 

Apache Corporation 

ARC International 

Autoliv ASP, Inc. 

Bacardi USA, Inc 

Barnes Group Inc. 

BNSF Railway Company 

BreitBurn Management Company, LLC 

Bridgestone Americas 

Brunswick Corporation 

Caterpillar Inc. 

Celanese 

Coca-Cola Inc. 

COG Operating LLC 

Conwed Plastics 

Cranston Print Works Company 

Curtiss Wright Corporation 

Dayton Superior Corp 

Delphi Corp 

DHI 

Dyno Nobel 

Ebara International Corp 

Elliott Group 

Euramax International 

Fechheimer Brothers Company 

Freescale 

FrieslandCampina (Thailand) 

G&K Services 

GEA WSUS 

Glatfelter 

Globe Speciality Metals 

GROWMARK, Inc. 

Haworth, Inc. 

Hitachi Canadian Industries Ltd. 

Holland 1916 

Indiana Packers Corp 

Ingersoll Rand 

Intermatic, Inc. 

IXYS Corp. 

Johns Manville 

J-W Energy Company 

KB Home 

Kongsberg Automotive 

Lennox International 

Link-Belt Construction Equipment 

Luitpold Pharmaceuticals 

Material Sciences Corp 

Mitsui USA 

Motorola Solutions 

National Fuel Gas Company 

Newmont Mining 

Nitto Americas Inc. 

NOVA Chemicals 

OCTAL 

Perfetti Van Melle USA 

Plains Exploration & Production Company 

Procter & Gamble 

Puma Energy 

Repsol 

SABIC IP 

Sasol North America Inc. 

Snap-on Incorporated 

Southco, Inc. 

Southern Star Central Gas Pipeline, Inc. 

Southwestern Energy Company 

Spraylat Corporation 

Stepan Company 

Teknion Corporation 

THAL ENGINEERING 

The Hershey Company 

TIDI Products LLC 

Tomra of North America, Inc 

Topcon 

Tower International 

Treatt USA 

TriMas Corporation 

Trouw Nutrition USA 

United Technologies 

Unitil Corporation 

URS Energy & Construction 

ViewCast Corporation 

Wells Enterprise, Inc. 

Williams International 


NOT FOR PROFIT (9) 

American Dental Association 

National Cooperative of Health Networks 

Association (NCHN) 

NRA 

Ohio Hospital Association 

The Dayton Foundation 

The Mind Research Network 

The Society for Industrial and Applied Mathematics 

(SIAM) 

YMCA of Greater Rochester 

YMCA of the Greater Tri-Valley 

SERVICES (66) 

3C 

A.S.K. ASSOCIATES, INC. 

Accor, North America 

ACI Worldwide 

Acme Services 

American Family Insurance 

American Student Assistance 

Associated Press 

AT&T 

AutoNation, Inc 

BI-LO, LLC 

Brownells Inc 

Campero USA 

CCIM institute 

CenturyLink, Inc 

CH2M HILL 

CHEP 

Corner Bakery Cafe 

Cornerstone On Demand 

COUNTRY Financial 

CSC 

David C Cook Publishing 

Day & Zimmermann 

Delta Air Lines, Inc. 

Denny's, Inc. 

Design Group Staffing Inc. 

DIRECTV 

DLT&V Systems Engineering 

ECG, Inc. 

ES&S 

FutureSense, Inc. 

Gannett Fleming, Inc 

Garden Fresh Restaurant Corp 

General Parts International 

Glacier Water Services, Inc. 

Heat Transfer Research, Inc 

ICBC 

Interpublic Group of Companies 

ipCG 

JetBlue Airways 

Kamehameha Schools 

KBR 

Laureate Education 

Legal Sea Foods, LLC 

LSG Sky Chefs 

MRIGlobal 

National Judicial College 

O'Charley's Inc. 

Odfjell 

OSG Ship Management, Inc 

PSEG 

Severn Trent Services 

Sprint 

Staples 

SuperMedia 

Technip USA Inc 

Texas Guaranteed 

The Andersons, Inc 

The Minto Group 

The New York Times Company 

Unisys 

University of Alaska 

Valere Consulting 

VT Services, Inc. 

W.W. Grainger, Inc. 

Wagner Industries Inc. 

UTILITIES/ENERGY (9) 

Con Edison 

Electric Reliability Council of Texas, Inc. (ERCOT) 

Fayetteville Public Works Commission 

Hibbing Public Utilities 

Idaho Power Company 

*Includes 5 undisclosed participants 


Africa 

Cape Town 

Johannesburg 

Pretoria 

Asia 

Bangkok 

Beijing 

Ho Chi Minh City 

Hong Kong 

Jakarta 

Kuala Lumpur 

Mumbai 

New Delhi 

Seoul 

Shanghai 

Shenzhen 

Singapore 

Tokyo 

Europe 

Amsterdam 

Athens 

Barcelona 

Berlin 

Bilbao 

Birmingham 

Bratislava 

Brussels 

Bucharest 

Budapest 

Dublin 

Frankfurt 

Glasgow 

Helsinki 

Istanbul 

Kiev 

Lille 

Lisbon 

London 

Madrid 

Manchester 

Milan 

Moscow 

Oslo 

Paris 

Prague 

Rome 

Stockholm 

Strasbourg 

Vienna 

Vilnius 

Warsaw 

Zeist 

Zurich 

Latin America 

Bogotá 

Buenos Aires 

Lima 

Mexico City 

San José 

Santiago 

São Paulo 

Hay Group is a global management consulting fi rm that works with 

leaders to transform strategy into reality. We develop talent, organise 

people to be more eff ective and motivate them to perform at their 

best. Our focus is on making change happen and helping people and 

organisations realise their potential. 

We have over 2600 employees working in 84 offi ces in 48 countries. 

Our clients are from the private, public and not-for-profi t sectors, across 

every major industry. For more information please contact your local 

offi ce through www.haygroup.com. 

Middle East 

Dubai 

Riyadh 

Tel Aviv 

North America 

Atlanta 

Boston 

Calgary 

Chicago 

Dallas 

Edmonton 

Halifax 

Kansas City 

Los Angeles Metro 

Montreal 

New York Metro 

Ottawa 

Philadelphia 

Regina 

San Francisco 

Toronto 

Vancouver 

Washington DC Metro 

Pacifi c 

Auckland 

Brisbane 

Melbourne 

Perth 

Sydney 

Wellington

Executive Benefits Survey Results of the 2011 ... - Hay Group

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