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Note from Matt Schnuck

This guide is a primer on leadership compensation. Use this to understand your options but always go to a lawyer to make your final plan.

I’ve started 10 companies, navigated to 3 exits, and transitioned many of them to new CEOs, who needed highly customized incentive comp plans. Today, I’m on 7 boards, from startups with early revenue traction to 80+ year-old companies with $3B+ in sales.

My experience paying TOP people:

• created incentive plans leading to 7-figure outcomes for top people across 3 exits,
• served on big company comp committees overseeing 7-figure CEO pay packages,
• hired compensation consultants in multiple industries (don’t do this!),
• overseen successful and failed CEO transitions (including CEO —> Chairman transitions),
• and much more.

I’ve navigated the thorny topic of incentive pay across bootstrapped businesses, VC-backed, closely-held family businesses and even non-profits in industries from consumer retail to real estate to software to B2B services.

When I help CEOs and business owners, one of the most common topics I’m asked about is how to effectively incentivize your TOP people.

I created this guide to share many of the principles discussed in those conversations.

I hope to help a few people avoid potholes that I have stepped in along the way related to one of the most important topics a business owner needs to master.

****FYI: This guide doesn’t go into non-monetary benefits like insurance, flexible work hours etc.

Identify the problem you’re solving

A great incentive maps to the problem you are solving AND reward the outcome you desire.

The five most common problems I see from business owners

“I need to FUCKING sell this thing”

“I need to create NEW growth”

“I’m fearful they will leave”

“I need to turn this around”

“I need them to think long-term“