IDEAS required for COMPENSATION in a startup!!?
It is a 3-year old, privately held, small U.S. training company, well known in its space. Wants to expand to third world Country-X. Set foot in Country-X one year ago, did initial business, but everything was directly controlled from the U.S. Nobody local to drive the business, hence, hardly started. Enter trusted Aide, a professional, trained in the U.S., who now wants to part-own and lead business in Country-X. U.S. provides funding, training material and back-end support. Initial 6 months evaluation agreed upon, and Aide settles on a small compensation package. Time passes. Aide, now in Country-X for an year, has control of daily buiness (and very little visibility on finances) and grows it seriously. Makes decent money for Country-X office, which is small and can collapse without the aide. Consider that Aide has forgone better offers to make this an "own" company. Looking for guidance on salary, % ownership etc. models with / without Aide's capital investment. What works?
Public Comments
- I believe the aide may be looking for percentage ownership, that is a share of the business, since he has already done the business development for the company. Very much depends on the level of contribution and the future contribution of the market to your existing business.
- I would agree that if the business in country-x is this dependent upon the aide then to really grow the business and retain their loyalty you will need to look at potential part ownership. I would look at a small percentage, it could be restricted ownership based on sales (through a contract agreement) could be based on stock (preferrably restricted) if the company is publically traded. I would look at what they bring as far as revenue as well as bottom line profitablity and look at a small percentage and something that can grown over time (in reasonable increments) to help create an incentive to the aide to grow the business. The aide should be compenstated on a base salary basis, possible ownership interest and as a way to reward and not "give" the company away also in bonuses paid either quarterly, semi-annually or annually based on the company's performance (I would get with the individual to agree upon performance metrics to base any type of bonus arrangement).
