NFP, an Aon company and leading property and casualty (P&C) broker, benefits consultant, wealth manager and retirement plan advisor, today released the 2025 NFP U.S. Executive Compensation and Benefits Trend Report. The report offers timely insights into how companies are reevaluating their approach to executive benefits during a period of economic uncertainty. This adaptation of executive benefits coincides with significant demographic shifts emerging in the workforce, underscored by many baby boomers nearing retirement, which is creating knowledge and leadership gaps in executive succession.
“Most employers (85%) recognize that they cannot afford to lose top talent,” said Tony Greene, president of NFP’s Executive Benefits division. “Baby boomers are exiting the workforce, which is driving employers to focus more on their future leaders and creating an opportunity to invest in retention strategies and leadership development programs that will help establish executive pipeline channels for Gen X, millennials and even younger employees. Talent and succession planning have become a business continuity issue.”
Nearly every respondent (97%) in the survey expressed concern about the economy. The environment is forcing employers to rebalance their approach toward customized executive compensation solutions that balance employee expectations with business health. One in five said concerns about economic uncertainty will lead them to alter the amount or type of executive benefits they offer.
“Although retention remains a top priority, financial discipline has regained equal footing as a strategic consideration,” said Greene. “The post-pandemic generosity that once defined executive compensation packages is giving way to a more measured, sustainable model as employers focus on financial prudence, flexibility and long-term value.”
Closing the Benefits Comprehension Gap
While many baby boomers are leaving the workforce, other key contributors are delaying their retirement, with nearly three in five executives (57%) working longer than they originally planned. However, this extended tenure doesn’t always mean better retirement preparation.
The report revealed a persistent gap between this cohort’s interest in retirement and the support they receive from their employers in planning for it. Only three in ten (29%) say they fully understand their benefits offering.
“Among high-value employees, there’s a direct correlation between understanding their benefits and engagement in their job,” said Greene. “Benefits only deliver value if key contributors recognize and appreciate them. When there’s a lack of clarity, the impact of those benefits diminishes. Fostering financial literacy, offering access to financial professionals, providing plan walk-throughs and simplifying complex language are all essential to closing the gap, strengthening engagement and deepening the loyalty of top talent.”
Reinforcing the Strategic Value of NQDCPs
For many companies, nonqualified deferred compensation plans (NQDCPs) are the cornerstone of their executive benefits, and the report reinforced that NQDCPs are proving indispensable. According to the research, forward-looking companies are using NQDCPs for executive retention (68%) and to support broader financial planning goals such as remaining competitive with peers (53%) and helping participants save for retirement (52%).
The research shows employers’ plans are working, with nearly nine in ten respondents (87%) saying their plan participants are satisfied with the impact of deferred compensation plans on their retirement preparedness.
“NQDCPs offer a rare combination of cost-effective design for employers and tax-advantaged flexibility for key contributors,” added Greene. “With inflation concerns and the uncertainty of future tax rates, many key employees are increasing their participation rate in these plans. Employers have an opportunity to make participation easier through clear communication and onboarding tools, and the ones that get this right will gain a lasting competitive edge.”
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