E—Restrictive Bonus Plan

The restrictive bonus plan is an employee benefit that allows an employer to provide valuable life insurance protection for a selected employee on a tax deductible basis to the employer. (Note: The restrictive bonus plan is also referred to as a restrictive endorsement bonus arrangement (REBA), a golden executive bonus arrangement (GEBA) and a controlled executive bonus plan.)

The employer has total discretion to select the employee, or employees, to be covered by the agreement, and the amounts of insurance to be provided. It is typically made available to a minority stockholder or a nonstockholder-employee since there is no reason for a majority owner to restrict his or her access to the bonus.