Please see attach
Ted (age 40) has received the following two job offers: (see other handout for details)
Chief Technology Officer of a small company – Salary of $150,000 per year plus up to a 10% annual bonus based on company performance.
Director of IT for a family-owned company – Salary of $175,000 per year plus up to a 20% annual bonus based on company performance.
List specific data or assumptions needed to make a recommendation.
Based on the information in the handout and the assumptions you listed above, which job offer should Ted accept? What is your justification for your recommendation? (Assume that Ted works in this job for 7 years).
| job 1 | job 2 | notes and comments | |
| total compensation | |||
| salary | |||
| bonus | |||
| group life insurance | |||
| disability | |||
| medical | |||
| deferred benefits | |||
| deferred compensation | |||
|
defined benefit pension | |||
| 401k |
Ted has received the following two job offers:
Chief Technology Officer of a small company – Salary of $150,000 per year plus up to a 10% annual bonus based on company performance. The company would pay for the following benefits:
Group term life insurance with a face amount of $600,000.
Group disability insurance with an annual benefit amount of $100,000 and an own occupation
definition of disability.
Medical insurance under a POS plan with a $1,000 per person deductible and a $2,000 family deductible. There is a 20% co-payment provision with a $5,000 stop-loss provision including the deductibles.
4% match on his 401(k) contributions from his base salary with a two-to-six-year graded vesting schedule.
$10,000 annual contribution to an unfunded deferred compensation plan.
Tickets to the company box at the local NFL football stadium once per season.
Director of IT for a family-owned company – Salary of $175,000 a year plus up to a 20% annual bonus based on company performance. The company would pay for the following benefits:
Group term life insurance with a face amount of $525,000.
Group disability insurance with an annual benefit amount of $100,000 and an educated and trained for definition of disability.
Medical insurance under an HMO plan with a $25 per visit charge.
$10,000 annual contribution to a deferred compensation plan held in a secular trust.
$20,000 annual phantom stock plan with a 5-year cliff vesting schedule.
Defined benefit plan with an annual benefit in retirement equal to 25% of his average salary the final three years. There is a 3-to-7-year graded vesting schedule, and a 1 year of service requirement for participation.
Membership to the local country club.
