Mobility Strategy - Market Practices

U.S. Domestic - Executive Relocation

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1 © 2022 Graebel Companies, Inc. All Rights Reserved. This document contains CONFIDENTIAL information. Reproduction and distribution of this document in any manner or for any purpose is prohibited without the express written permission of Graebel Companies, Inc. U.S. Domestic Executive Relocation – Market Practices Provision Market Practices Definition / Eligibility > Executive-level employees relocating within the Continental United States. > Note: Each Company will have its own definition of what constitutes an "executive- level" employee. Pre-Decision Consultation and Assessment > Many companies will provide a pre-decision consultation to help the employee understand the Company's relocation benefits and financial impact of the relocation. > This pre-decision assessment is very important for understanding the current housing market in both the departure and destination locations; understanding home values can be essential for employees when considering relocating. > Cost estimates created for budget and/or accrual purposes can be very useful for the business as well. Home Finding Trip > Companies provide reimbursement for airfare or mileage, hotel, and meals for employee and one accompanying family member. > Some companies will also reimburse childcare costs for dependent children not accompanying the employee on the trip. > The typical length of a Home Finding Trip is 5 days/4 nights; however, for executive- level employees, some companies provide a lengthier trip of up to a full week. Relocation Allowance > Most companies provide a cash allowance to help mitigate miscellaneous expenses not expressly covered by the policy. > While the Relocation Allowance was historically calculated as a percentage of base salary, many companies have moved to a flat amount, or a variable amount based on family size. For executive-level policies, this amount can range from $7,500 up to $15,000. > The allowance is usually provided upon signing the Repayment Agreement and within 30 days of the official start date. > The employee is not required to submit documentation to support how this allowance is spent. Home Sale > For executive-level employees, a "Buyer Value Option" program is the most typical benefit as it provides tax protection for the employee/company. > Home price listing caps and other incentive options are employed to encourage a quicker sale of the home, e.g., Home Sale Incentive (see below). > For senior executives, some companies will utilize a "Guaranteed Buyout" program, which is similar to the BVO but entails a guaranteed purchase of the home if the employee cannot find a suitable buyer. > "Direct Reimbursement" of home sale closing costs can also be used; this eliminates the risk of the company purchasing the home but adds significant tax cost to either the company or the employee.

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