Hey, Smarter Vets, CJ Burnett here and today I’m going to talk to you about deferred compensation. So, we talk a lot about the three Rs. I’m sure all of you know what the three Rs, right? No, maybe you don’t. Okay, so in order for people to remember, because I’m going to look stupid. I’m about to do something. It’s going to make me look really stupid. I’m doing it for you.
I want you to know that I want you to do. Okay. So I want you to think of the three Rs, right? You can’t say it without feeling like a pirate. Okay. The three Rs, recruit, retain reward. All right. So now that I’ve done something stupid, you’re going to remember it forever. Did that for you. The three Rs, you have to have recruiting programs, you have to have reward programs, and you have to have retention programs. Every good business has all three. A lot of people get them conflated and get them confused with each other.
Here’s how it works. A deferred compensation falls under a retention program. One of the reasons why it falls under a retention program is that retention programs always have the same three attributes. A good retention program is deferred, it is substantial, and it solves some sort of emotional need.
In other words, if an employee stays with me for 10 years, I’m going to give them $300,000 and it’s going to be something where I let them know like, look, this is $300,000 that you could take and you can buy a house with it, you can pay off your student loans with it. You could put your kids through college with it. It doesn’t really matter, right? Whatever that person has from an emotional need perspective, you can always say this is the money for that, even though it’s really just cash in their hand, and they can do whatever they want with it. So that’s what a deferred compensation is.
That’s deferred. So if you if you’re wondering, how do I use that with a key employee, a lot of times you might look at important people in the business that you know that you need to retain, you might look at doing it for them. You might look at doing it for those people that you’ve already done all that you can from a reward perspective. And they’re really high talent on your team and you want to keep them forever. They might you might look at a deferred compensation in order to keep them to in the business at least for the next maybe 5, 10, 15 years.
You have to be very careful though usually you involve an attorney with this particular type of plan who drafts up the agreement. You make sure you have a financial advisor or somebody to help you with how you’re going to set aside the money for the deferred comp. Usually you have some sort of fund that’s inside the business that then can put aside the money into a into a place that then that bucket of money as it grows will eventually then be able to pay the person at the end of the deferral period. I hope this helps. Hope to see you again next time. I hope this helps. Hope to see you. Hope this helps.
Video Summary:
Attracting great talent is only half the battle—keeping them is where the real challenge begins. In this eye-opening video, CJ Burnett reveals how deferred compensation can be a game-changing strategy for retaining your top veterinary team members long-term.
You’ll discover the “Three Rs” of a strong business: Recruit, Retain, Reward—and why deferred compensation goes beyond just money. It’s about creating meaningful incentives that connect with your team’s emotional and professional goals.
CJ walks through how to structure a plan that works, including key legal and financial steps to get it right. If you’re serious about protecting your practice’s future and keeping your best people committed, this is a must-watch.
This material is intended for general public use. By providing this content, Park Avenue Securities LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation, or to otherwise act in a fiduciary capacity. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. Tom is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. Florida Veterinary Advisors and The Next Step Planning Group are not an affiliate or subsidiary of PAS or Guardian. California Insurance License #0K80141. AR Insurance License #15823672. Florida Veterinary Advisors is not registered in any state or with the U.S. Securities and Exchange Commission as a Registered Investment Advisor. The individuals associated with Florida Veterinary Advisors do not maintain specialized licenses or qualifications for the financial services provided to veterinary professionals. 7989827.1 Exp 5/27