One of the most critical components in designing a successful internal ownership transition strategy is ensuring the financial feasibility of the plan for the firm, its current owners and the key employees who will become the next generation of leadership. Balancing affordability with sustainability is particularly challenging when state licensing laws restrict equity ownership by non-licensed professionals. In these cases, non-statutory (non-qualified) deferred compensation plans offer a powerful alternative to traditional equity ownership.

These plans simulate the financial benefits of ownership without transferring equity, making them ideal for rewarding and retaining key non-licensed employees while maintaining regulatory compliance.