In a recent survey of the Principal Financial Well-Being Index, more than three-quarters of key employees
said they were interested in a tax-advantaged plan to help them save more for retirement, beyond the qualified retirement limits.
Under these facts and circumstances, X does not meet the responsibility test and thus is not a key employee
If an organization does not establish a presumption of reasonableness and the IRS questions compensation paid to key employees
, the burden is on the organization to prove that the compensation is reasonable.
insurance still applies if the "key" is an owner.
their fortunes, they are coming to recognize the importance of retaining and rewarding the key employees
who kept them afloat during the recession.
The real value of a split-dollar arrangement lies in a company's ability to help a key employee
buy permanent life insurance and maintain it in force while it incurs the acquisition costs and front-end load charges (agent commission).
When a key employee
considers a new employment opportunity, he or she also must consider the value of the deferred compensation that would be lost.
If the SEP/IRA is a "top heavy" plan, a minimum employer contribution must be made in the amount of the lesser of 3% of compensation or the largest percent of compensation contributed on behalf of any key employee
The first step, though, is to prepare a checklist of family and key employee
Pulliam, TC Memo 1997-274, involved (1) the transfer of a funeral home business by a parent corporation (Homes) to a newly formed subsidiary (Chapel), (2) distribution of 100% of the Chapel stock to Homes's sole shareholder and (3) sale by the sole shareholder of 49% of the Chapel stock to a key employee
Critical to this determination is the key employee
For example, option shares can be granted to a particular key employee
using a factor obtained by dividing his base compensation by the aggregate base compensation of all key employees
, or options could be granted so that vice presidents get 1,000 shares, senior vice presidents 2,000 shares, executive vice presidents 3,000 shares, and the president 4,000 shares.