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Hiring and developing key employees to build your management team is essential to business growth, but what type of compensation incentives can you offer to retain them? Maintaining a strong management team is a critical component to the overall success of any company, which is why a well-structured compensation plan aligns the incentives offered to key employees with the company’s short- and long-term goals. To help structure a compensation plan that benefits your business and management team, we’ve weighed the pros and cons of some options below.
Consider these factors when evaluating effective compensation strategies for your key employees:
|Direct Ownership Interest||
|Stock Options/Phantom Equity||
With these options in mind, here are steps to structure and implement a compensation plan suitable for your business:
A compensation plan will vary for each business. For example, a business owner may choose to combine phantom equity and a bonus plan together that aligns with short- and long-term performance goals. The bonus plan would be tied to the business’ goals outlined for the year and the phantom equity would compensate for growth in value on a triggering event, such as a business sale.
Seeking assistance with structuring a compensation package that benefits your overall business strategy? Contact our business advisors today.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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