Executive Compensation

I have recently been through several executive compensation processes, and I think it might be worth the discussion.

At the very basic level, the compensation is whatever the market will bear. But what will the market bear exactly? It's a negotiation!

So how do you know?

I don't know, and of course it depends on your situation. But this is a place where knowledge is king. For example:

My side, your side

In all negotiations, it is helpful to view things from the other side(s) of the table. But on the other hand, if both sides don't win, both sides lose, in an employment situation.

I cannot answer those questions precisely today, because they have been asked in a court case where I am an expert witness, and I don't know the precise answer or what further information may crop up I was unaware of.

But generically, it has to be at least a 6-month process just to find a suitable replacement, and likely another 6 months before the replacement is well-entrenched and fully aware of the situation, able to make good decisions for the specifics of the company, and managing whatever the previous executive was managing with all of the requisite information and knowledge required to do all the same things.

I have had a few folks come and go from one of my companies lately, and even when someone else is there and working the related issues, the changes in responsibilities can wreck havoc on other plans. Some projects get delayed or terminated. Others succeed or fail. Other workers may leave or get delayed or disgruntled.

Which really means...

Negotiate well for what you want, and come to accept it as the deal you made. But also make certain that it is a deal that is fair to both sides.

And then there are the comparables. We found that the COO of a $1B or larger company gets on the order (average of) $100,000/mo in total compensation. Which is what I accepted as fair... Now all I have to do it help turn it into a $1B/y corporation...

A call to action

Want fair compensation for your executive compensation? We can help you get there. But to help you, you have to start by helping yourself, and...

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In summary

The answer to all such questions is "what the market will bear". and "you are worth what you can negotiate".

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