Vergütungsstruktur fürs Führungsteam mit Wachstum skalieren

0:00Unternehmer/Gast coaching company, based in New Zealand, business partner Marty there. LTV to CAC is 1 to 15. Challenge at the moment is we've scaled very nicely, but we've kind of outgrown our leadership comp structures. So, like we were like, "If we achieve X, then happy days you're going to have a bonus of Y." But, we've all just gone like that, and now everybody's achieving X, and everyone gets a bonus.

0:27But, that's now kind of capped out. How do we scale comp as we scale growth? I don't know. That's That's a That's a loaded question. Um okay, so right now, can you tell me exactly what it's based off of? Uh based off of what? Different by department. So, it's based off total sales, churn, and uh total number of booked triages, which is our first sales call. And how often do you re like We are paying it out monthly, based on monthly metrics, and uh we could renegotiate at any point, I suppose, but don't want to do that, and then outgrow it again in 5 months time.

1:05Right. Um so, when did you start? When did you put it into place? How long ago? Uh varying by head of department by 6 months to 12 months. Okay, that makes sense. Um so, I will say this. I think that for most compensation structures, you really have like a couple different things you can think about, which is like you have for compensation, there's really leadership compensation, and then there's technical tracks of compensation. Meaning, you have the tracks for how you're going to compensate your leadership, and then there's the tracks for how you're going to compensate individual contributors. And those are both can have bonus structures. So, how I suggest that people do it for leadership is basically you have you pull your leaders into you chunk them by maybe you have executive team, you've got a director team, you've got a manager team, right? Some people in here, they're only going to have one team, so you might only have one team right now. Um most compensation structures in general, you want to review annually. So, I might put in place a a structure, and I know that within three to four quarters it's probably going to outgrow. So, I'm going to have to redo it. So, that's just like something that you want to put out there for people in general.

2:11When it comes to leadership compensation, um I typically like a structure where the highest level of leaders are tied to some kind of profit share with the business. So, like a very like P safe metric is like, you know, you can put aside 10% of profits for a profit share pool, and then you get to dedicate that to your highest level of leaders. Now, if you don't have a lot of them right now, maybe you only give 1% to your CMO, 1% to your COO, 1% to your CFO, and you have 7% left, you don't give that to anybody, because you're waiting to fill those seats.

2:42That's top level. Second level would be something of like if you have your mid to high-level leaders, it might be that they get their annual pay, plus they get a bonus that could be anywhere between, based on their experience and their expertise, 20 to 100% of their annual salary. They can earn up to a bonus, right? And if they are less experienced, it is on the lower end. If they're more experienced and unique and hard to find, it's on the higher end.

3:07Then you've got your the level down from there, which I usually would say is uh annual salary plus anywhere between 10 to 35% of uh annual salary as a bonus. Sure. That's a structure that I think is pretty safe to follow and works pretty well. How people achieve those metrics, I base them off of the goals of the company. This is all coming back to your question. So, for each level, they're tied to um the highest level is profit share, right? So, that is 100% like it is individual and business, it is all the things that goes into profit.

3:39The levels below that, I tie it to what I call like a management by objective structure, uh MBO. And so, essentially, 50 anywhere between 40 to 60% of their pay is tied to the company performance, and anywhere between 40 and 60% of their pay is tied to the individual performance. Based on what level of experience they are and how autonomous your team are, uh that's where I say like it's you can sway either way. Um I usually do it like 60% of your bonus is tied to company performance, and 40% to individual uh for both levels of leadership. I like that structure the most. And then when it comes to, okay, what is company performance?

4:20This is for leaders, right? I'm going to say that it's going to be probably two to three metrics. Uh it can be revenue and profit, or my favorite is revenue, profit, and growth. Because I don't really want to bonus people the same as last year if we [ __ ] stayed the same. Like, I'm like, "Great, we didn't grow. Amazing. Congratulations. We [ __ ] suck, you know?" Um so, I like the growth metric.

4:43Alex Um and then the individual, I tie to, you know, we do company planning, and when you do the company planning, you're figuring out what are the objectives of the business for the year. Then you tie that down to what are the objectives for each department for each quarter. And so, that is what I would tie in the beginning to people's um compensation when you are growing fast. Here's why. Because so, recently [clears throat] I I literally am doing this in a company right now that just went from It's one of our portfolio companies went from, you know, 45 million to 75 million to we're going to cap it like 115 million this year, and they're like, "How do we comp like what KPIs?" Cuz the KPIs are changing. And I was like, "Listen, [ __ ] the KPIs. It is technically better to go with KPIs. However, when they continue to change because the business is growing so quickly, I prefer to tie it to something not as precise, but more useful, which is our quarterly objectives."

5:37So, for leaders and even individual contributors, I said, "Let's tie it to their quarterly objectives rather than metrics until we get to a point where the metrics have enough of a baseline that they're reliable, and we can properly compensate people off of them." Does that make sense? It does. I think I understood all of that, except for one clarifying piece. For sure. Uh so, you're saying that the total package would be basically 50% base and a 50% uh variable comp? No, so

6:08>> for the leadership compensation, >> Yeah. they get their base. Yeah. This is This is just an easy suggestion. They have a base, and then they also have a bonus. The bonus can be, say your base is $300,000. Yeah. And you're less experienced, so I'm going to say Okay, yeah. So, say your base is $100,000. You're less experienced, so I'm going to say I'm going to give you up to 20% of that $100,000 you can earn as a bonus. Yeah, cool.

6:35>> So, of that, the 20,000 is based off of 60% of it is based off of company goals, and 40% off of it is based off of your individual goals, which means, you know, whatever, 12,000 and 8,000. Perfect. Thank you for that. Yep. Appreciate it. Cheers. And that way it balances it so that if somebody just crushes, but like the company doesn't, they still get some slice of it. On the flip side, maybe they had to reroute their role, and the company crushed it, but they didn't do their individuals, but the company overall won. Right? And if neither of those things happen, then you're like, "All right, well, you suck, the company sucked, so no one gets bonus." And I will just say one thing for everyone here when it comes to compensation, which is be really careful what you compensate on, because often times I am not the biggest fan of compensating people on metrics that are purely individual.

7:28Because then what you do is you create competition. Because if they're only based if their metrics are if they're only bonused off of metrics that are completely aligned to them and nobody else, then what incentive do they have to be a teammate? What incentive do they have to help people? What incentive do they have to help the other department when the other department needs them to hit their goals? You know what I'm saying? The incentive we had was the marketing manager was comped on total triages booked.

7:53All she did was just write ads. Of course. Right. Oh, sweet. So, I know I paid her extra incentive and a bonus. So, here's something else to think about. If you have metrics you compensate people on, I always say you want a push metric and a pull metric. Which is like, how do I know they're winning, and how do I know they're not [ __ ] up other people's work with this metric? So, like sales, it might be like, "I'm going to compensate you on sales, and you get deductions for back outs or refunds." So, like Jim Launch, if people backed out in the first 4 weeks, that deducted against sales.

8:22Because we know that if someone backs out in the first 4 weeks, it's typically a sales issue. There are also no perfect metrics. So, some of you are thinking, "Well, what if that wasn't Yeah, [ __ ] it." There's no perfect metrics. Nobody is completely autonomously controlling any metric in the business, and people will always use that as like, "Well, I don't think I should be compensated." It's like, yes, business isn't perfect. There are no perfect compensation solutions, so I will just leave it at that. And that goes for any kind of um compensation metric. Having paired metrics, and they're typically a quantity and quality metric that are paired. So, if it's like you're you have a own a cleaning business, it's like, how many did you clean, but how many did you have to go back and reclean because they weren't good, right? So, just having those customer service, how many tickets did you fill, but how many like what was the average star? Same idea.

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