A thriving family-owned lettuce producer employed a non-family member CFO and several top sales people who were critical to the success of the company. The owners were reluctant to give up their shares in the business to non-family members but were very concerned that their key employees might be tempted to leave for other opportunities, especially with competitors.


Action Steps:

The company’s commercial insurance broker introduced Grant Hinkle & Jacobs to help design and fund a program that reduces key employee turnover while incentivizing performance.

Grant, Hinkle & Jacobs developed a program that provides a meaningful retirement benefit and a death benefit to each executive. Other employees are not eligible. Importantly however, benefits are paid only after the executive meets individual goals tied to longevity, productivity, and profitability. If they leave, they get nothing, so it makes “jumping ship” a much more costly decision.

The program is not funded with company stock; rather, it is funded with company-owned permanent insurance on the lives of the executives. The policies are specially-designed to provide both a retirement benefit (from the cash value account of the policy) and a death benefit. Key advantages are the insurance policy approach eliminates the need to pay benefits out of future cash flow and the company gets to deduct the benefit distributions it makes to the executives or their families.



The owners are delighted with the results so far: zero executive turn over, improved employee loyalty, and increased productivity. Plus, they feel good about being able to offer their key employees something of value, other than company stock, that rewards them for a job well-done. The executives and their families are equally enthusiastic, as they feel more appreciated knowing they will be will be eligible for meaningful benefits in the future if they stay and work hard for the company.