Personalized benefits drive retention amid 'Silver Tsunami'

• Key Insight: Learn how nonqualified deferred compensation is becoming table-stakes for executive retention.  
• What's at Stake: Losing critical leadership amid accelerating retirements could disrupt strategic continuity and talent pipelines.  
• Supporting Data: 24% of firms added new executive benefits in 2025 versus an 8% twenty-year average.  
• Source: Bullets generated by AI with editorial review

With rank-and-file employees the focus of open enrollment, it's easy to overlook the needs and desires of leaders. But benefit brokers and advisers have a significant opportunity to help reshape executive compensation packages in this competitive market segment. 

The battle for executive talent is intensifying amid economic uncertainty and demographic shifts with baby boomers exiting in droves. C-suite turnover in Fortune 500 or large public companies more than doubled to 20% by 2019 from less 10% in 2016-17, while CFO turnover at large companies across the U.S. and around the globe reached a six-year high in 2024 to 17.8%.

Noting that more than half of all executives are likely to leave their positions in the next two years, Goldman Sachs Ayco's 2025 Executive Benefits Survey found that 24% of companies added new executive benefits this year, which was significantly up from an 8% average seen over the past 20 years.

Read more: Lob's SVP of people embraces remote work and AI in her benefit strategy

Recent NFP research also noted that forward-looking companies are strategically leveraging nonqualified deferred compensation plans, with 68% using them for executive retention and 87% reporting that plan participants are satisfied with the impact on their retirement preparedness.

'Silver tsunami'

Corporate America is facing a "silver tsunami" wherein about 10% of the U.S. workforce will retire between now and the end of 2030, according to Tony Greene, president of NFP's executive benefits division.

"There are not enough people behind that group to fill all the spots they're going to vacate," he observes, noting a fair amount of personalization around retention programs. 

Why this becomes important is three in five executive executives are now working a little longer than they anticipated in part to plump up retirement savings, he explains. Another reason is that employers recognize and value the need for their knowledge transfer. 

Read more: Preparing for open enrollment: Growing demands give rise to fiduciary advising

Non-qualified deferred compensation is becoming table stakes "because a qualified plan just doesn't fill the gap of 15% of gross income from a savings perspective," Greene explains. Most Fortune 500 companies have these plans for that reason, but he says it's now accelerating into the middle market. 

To raise the bar on personalization, he says employers may offer an individualized bonus structure or build a five-year supplemental plan that pushes back retirement to age 68 or 69 rather than 65 or 66. 

Two recent client examples come to mind. The first involves a 1,600-employee company that implemented very individualized bonus structures under Section 49A to retain eight executives who are planning to retire in the next two to three years. 

The second involves hiring a former Fortune 500 company executive in his late 40s at a 700-person company whose purpose was to back up an individual who planned to retire in two years. As part of this succession plan, a sizable signing bonus was designed to vest in fifths over the next five years with an opportunity to re-defer after the second distribution. 

Scrutinizing metrics

Scrutiny of executive pay programs and levels has been — and will continue to be — a topic that companies will need to address, according to Lauren Mason, Mercer's U.S. workforce solutions leader.

Read more: How benefit managers can help employees with executive dysfunction

While not expecting these programs to be customized, she believes companies will continue to ensure that they're tailored to meet their specific needs, as well as achieve key operational and strategic objectives. 

"To that end, we expect board compensation committees and senior management teams to continue to regularly assess short-term and long-term incentive plan metrics and weightings to ensure alignment with the company's strategy," she says. 

Her view of these assessments is that they'll likely continue to evolve from a general pay-for-performance philosophy to more targeted approach that sets an amount of pay to certain levels of performance. The key will be incorporating multiple elements such as the industry-specific environment, company-specific factors, market practices with respect to executive compensation program designs and pay levels. 

Greene suggests that benefit brokers need to find partners in the executive benefit space to help their employer clients navigate their way through strategic objectives. This will help them become trusted advisers in an increasingly commoditized marketplace beholden to price pressure and step into a more consultive role. 

"These are great conversations for this adviser community to be having with the leadership at their plan sponsors," he says.