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Executive bonus compensation is a financial incentive plan provided to key executives, often as cash bonuses, stock options, or deferred compensation, to reward performance and align their goals with the company’s success.
For executives, bonuses are typically treated as ordinary income and subject to income taxes. For employers, the bonuses are usually tax-deductible as a business expense, making it a mutually beneficial arrangement.
Executive bonus plans help attract, retain, and motivate top talent. They are also flexible, easy to implement, and provide tax advantages for the company while encouraging long-term commitment from executives.
Yes! Many companies link executive bonuses to measurable metrics such as revenue growth, profitability, cost reduction, or individual achievements, ensuring alignment with the company’s strategic goals.
Executive bonus plans are simpler to set up and focus on providing immediate or near-term financial rewards. Unlike retirement plans, they don’t have complex regulatory requirements and are highly customizable based on the company’s objectives
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