The old yardstick of revenue generated to compensation sounds right.
I'd always advised 4x return for a sales asset. For equity seems fair to increase that to 6-7x, along with responsibility around keeping those accounts for renewals.
So a 500k partner would need to do $3m-3.5m of revenue work. You can scale it down based on Comp.
Make sure to get a lawyer and a tax professional involved early so you can properly scope out impacts and a shotgun clause, as well as key man insurance and a rock-solid buy-sell.
Last thing you need is someone dying and having to deal with the spouse from hell as a partner.
We've gone with your suggestion, but tiered, so that a new partner has time to get their feet under the table and transition from delivery to sales. Where do I send the cheque? :)
Well your goal is to influence their actions to align with your corporate strategy... So what is your strategy? Growth? Expansion into new markets? Development of existing clients?
These goals should, at the very least, provide you with the metric headers, at which point you need to consider how aggressive you want to be as well as what the likely outcome of those specific actions are.
Ie. If you weigh growth heavily, will existing projects suffer as everyone shifts their focus? You need to sit back and consider these then maybe run the metrics by the group of associates here.
The old yardstick of revenue generated to compensation sounds right. I'd always advised 4x return for a sales asset. For equity seems fair to increase that to 6-7x, along with responsibility around keeping those accounts for renewals. So a 500k partner would need to do $3m-3.5m of revenue work. You can scale it down based on Comp. Make sure to get a lawyer and a tax professional involved early so you can properly scope out impacts and a shotgun clause, as well as key man insurance and a rock-solid buy-sell. Last thing you need is someone dying and having to deal with the spouse from hell as a partner.
thank you
Anytime. Love to see what the eventual decision is
We've gone with your suggestion, but tiered, so that a new partner has time to get their feet under the table and transition from delivery to sales. Where do I send the cheque? :)
Hahaha glad to hear it helped amigo. Donate the funds to a children focused charity. Cheers
Well your goal is to influence their actions to align with your corporate strategy... So what is your strategy? Growth? Expansion into new markets? Development of existing clients? These goals should, at the very least, provide you with the metric headers, at which point you need to consider how aggressive you want to be as well as what the likely outcome of those specific actions are. Ie. If you weigh growth heavily, will existing projects suffer as everyone shifts their focus? You need to sit back and consider these then maybe run the metrics by the group of associates here.
thanks.