Salary and motivation of the executive director
Posted: Tue Jan 28, 2025 6:24 am
The CEO of a company must have a decent salary level that corresponds to his position in the hierarchy of the enterprise, the volume of work and the degree of responsibility.
Often the salary of such a manager is of a motivational nature and consists of several components:
salary;
bonus for achieving KPI;
percentage of profit (discussed individually).
Get clients from the site every month
In a guaranteed volume
Read more
However, the bonus portion must switzerland email list be calculated correctly and not provoke the manager to formally resolve issues important to the company in order to achieve certain key indicators, which often comes at the expense of its activities and development.
Removing the salary part, leaving only the bonus part, is wrong and inappropriate. The activities of the executive director are much broader than achieving any specific indicators.
Sometimes the owner of the company may have an idea to make the executive director a partner, transferring a share in the company to him. Often in this way he wants to motivate his employee to more fruitful work and full dedication, and sometimes to retain a valuable employee, thanks to whom the company is constantly growing.
However, it is important to understand that the situation may change: a person may start moving in a direction that is not right for the owner, and disagreements may arise. What to do in this case? Ideally, it is necessary to write down all possible scenarios for the development of events and ways to resolve conflict situations on paper and sign them on both sides.
For example, a manager who is an employee can be fired, but someone who is a partner in the company can't. Accordingly, if a person is no longer satisfactory as an executive director, difficulties may arise.
If there is an idea to make a person a partner, the share can be sold to him, and at market value or with a small discount. In addition, it is important to understand that any employee, even the most irreplaceable, can at some point behave incorrectly. For example, demand a part of the company in exchange for his services.
To avoid such developments, which often turn out to be unexpected, you need to monitor the actions of your subordinates, control them, and try to anticipate the possible actions of employees.
At the same time, you shouldn't discard the idea of motivating an excellent employee by giving him a share in the business. This can be a very viable option in a number of cases. For example, if a person dreams of opening his own business, you can make him a business proposal, but not earlier than after a couple of years of successful work at the enterprise. The options may be as follows:
he can buy a share in the company or in one of its activities;
You can offer him to take over one of the planned business areas, organizing an independent company for its development, provided that the head of the enterprise will be a shareholder in the new company.
Often the salary of such a manager is of a motivational nature and consists of several components:
salary;
bonus for achieving KPI;
percentage of profit (discussed individually).
Get clients from the site every month
In a guaranteed volume
Read more
However, the bonus portion must switzerland email list be calculated correctly and not provoke the manager to formally resolve issues important to the company in order to achieve certain key indicators, which often comes at the expense of its activities and development.
Removing the salary part, leaving only the bonus part, is wrong and inappropriate. The activities of the executive director are much broader than achieving any specific indicators.
Sometimes the owner of the company may have an idea to make the executive director a partner, transferring a share in the company to him. Often in this way he wants to motivate his employee to more fruitful work and full dedication, and sometimes to retain a valuable employee, thanks to whom the company is constantly growing.
However, it is important to understand that the situation may change: a person may start moving in a direction that is not right for the owner, and disagreements may arise. What to do in this case? Ideally, it is necessary to write down all possible scenarios for the development of events and ways to resolve conflict situations on paper and sign them on both sides.
For example, a manager who is an employee can be fired, but someone who is a partner in the company can't. Accordingly, if a person is no longer satisfactory as an executive director, difficulties may arise.
If there is an idea to make a person a partner, the share can be sold to him, and at market value or with a small discount. In addition, it is important to understand that any employee, even the most irreplaceable, can at some point behave incorrectly. For example, demand a part of the company in exchange for his services.
To avoid such developments, which often turn out to be unexpected, you need to monitor the actions of your subordinates, control them, and try to anticipate the possible actions of employees.
At the same time, you shouldn't discard the idea of motivating an excellent employee by giving him a share in the business. This can be a very viable option in a number of cases. For example, if a person dreams of opening his own business, you can make him a business proposal, but not earlier than after a couple of years of successful work at the enterprise. The options may be as follows:
he can buy a share in the company or in one of its activities;
You can offer him to take over one of the planned business areas, organizing an independent company for its development, provided that the head of the enterprise will be a shareholder in the new company.