After the Sept. 11 terrorist attacks, Joe Jones caught himself second-guessing his decision to break out on his own and set up an executive-compensation consulting firm.

Having spent 12 years with The Todd Organization, a St. Louis-based global compensation powerhouse, the view from his new Vermont Street office in Lawrence was cloudy at best.

Joe Jones, co-founder of The Executive Benefits Network, is busy signing clients, adding partners and building a business in spite of recent economic downturns.

“After 9-11, it went dormant,” Jones said earlier this year. “I had nothing. I thought I had made the worst mistake of my life.”

But his worries didn’t last long.

The Lawrence resident, who co-founded The Executive Benefits Network, is busy signing clients, adding partners and building a business that continues to draw interest as the economy struggles to emerge from recession.

The network creates deferred-compensation plans for a company’s top-tier employees from human relations managers to chief executive officers that help companies attract and retain top talent on a cost-effective, tax-deferred basis.

Heading into March, the network had $320 million of assets and liabilities under management, working with companies such as Farmland Industries, Payless ShoeSource, Butler Manufacturing, Midwest Express Airlines and Manpower.

The network drummed up $138 million of business between December and Feb. 15, just as the edges of the recession started to wear down.

“The executives right now, there’s really no need for a handcuff because they’re not going anywhere,” Jones said of his company’s financial plans for keeping top executives from leaving for greener pastures. “But companies are trying to put systems in place now, because they already are seeing orders going up and want to be ready to go.”

The systems are designed to help top executives and their companies alike.

Because contributions to company-sponsored pension plans and 401(k) retirement accounts are capped at certain income levels, Jones said, companies and their top executives need to find ways to sock away money without running into massive tax bills or income liabilities.

That’s where network officials Jones, at 1035 Vt., and his partners across the country step in.

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Path to prosperity

Consider an executive who earns $100,000 a year. Current laws would cap an annual 401(k) contribution at $11,000, Jones said, but that may not be enough to properly finance the official’s desired retirement.

The company, then, might agree to hold back another $9,000, and guarantee that the employee would receive that money upon retirement with a minimum rate of return. The rate of return could be tied to the return on a particular mutual fund, he said.

The advantages work two ways, Jones said. The executive would avoid taxes anywhere from 28 percent to 35 percent on the deferred compensation until retirement, while the company would avoid carrying a debt until it had to pay off, Jones said.

Last year, Kansas City, Mo.-based Farmland Industries used the network’s expertise in setting up benefits plans in a competitive market. Such plans often serve as an “entry fee” for people considering employment offers, said Holly McCoy, the cooperative’s vice president for human resources.

“You need to provide something that is in the ballpark,” McCoy said. “It’s a basic thing that is expected by an employee a benefits package to satisfy their needs. If you didn’t have that, it would be a barrier.”

Such plans also offer investment diversity for executives, Jones said. He pointed to the collapse of Enron Corp. as an example of what a mixture of stock options and heavy weighting in a company’s own stock could do to an executive’s financial future.

Expanding options

“Enron was a wake-up call for diversification,” said Jones, who added that “stock options are no longer looked as the panacea of wealth. Now companies are looking to allow their executives to defer their own money and diversify it away from their company’s stock and stock crashes.

“Right now companies are looking for a plan to empower their employees to take care of their own retirements. These plans allow that without government limits.”

Jones said that he sets up deferral plans with investments away from the company’s own offerings. If a company’s 401(k) is heavy in Fidelity funds, for example, he might set up the deferred-compensation package in American Century funds.

The network is growing. Jones and his business partner, David Fritz Jr. in Milwaukee, last year added Robert Schehrer in Lawrence to assist with financial planning and estate-planning efforts. The network later added Brian McNally in Boston and Weldon Baird in Atlanta.

Another company, Rivenet.com of Chicago, provided a framework for creating and administering plans through the Internet. The system allows a company’s benefits manager to adjust holdings on a daily basis, with real-time input from Jones and other professionals within the network.