Unit 14 Preview and Introduction
Preview
This unit will cover the following topics:
- Compensating Owners and Execs in Unincorporated Entities
- Compensating Owners and Execs in Corporations
- Incentive Compensation
- Contracts and Negotiations
Introduction
Founders are busy. Starting a company is not easy and there are plenty of things to do. However, if the founders are “all in” with their start-up then they need to be able to afford to live. The company doesn’t have money to compensate anyone competitively, and that goes for the founders and the executives. But the startup can provide compensation in ways that are tied to the growth of the company which yields upside if the startup is successful.
Additionally, founders cannot do everything for their company. As such, they need to hire a management team that can help run the business. There are various ways to compensate and incentivize upper management/executives outside of the typical benefits that employees receive (Employee benefits will be discussed in Unit 18.)
This unit will discuss ways to compensate founders and employees, particularly upper management. Note that this is not a comprehensive list nor does this Unit cover all of the complexities relating to executive compensation. 💡 As you read this Unit, consider whether you would ask your start-up client anything in particular about compensation needs/desires.