A presentation I gave on incentive plans for startups. Download it to get the accompanying audio

1. Incentive Plan Seminar Mark MacLeod April 2010 startupcfo.ca @startupcfo

3. Issues

4. Suggestions

5. Bonus Plans

6. ESOP

8. Incentive Comp Incentive: any factor (financial or non-financial) that enables or motivates a particular course of action.

9. What Motivates You? Depends….

10. Incentive Drivers

12. Where to focus? Strategic vs. Practical

13. Cause and effect

14. Clarity

15. Alignment

16. Culture

17. Inconsistency

19. Make goals clear and tied to individual / team actions

20. Annual goals and quarterly goals

21. Communicate consistently & regularly

22. Reward excellent results and those people who make them happen

23. Bonus Plans Who, When, Where, Why? Who: Senior execs, Department directors, people with quotas & /or quantifiable time-driven targets When: Annual, based on company & individual performance, spot grants can be used Where: After minimum revenue or break-even Why: Reward quantified short term performance

24. Bonus Plans How Much?

25. Bonus Plans Mechanics Bonus = Corporate Performance * Individual Performance * Base Salary %. Bonuses will be paid twice yearly, at the discretion of the CEO. Bonuses will only be paid if corporate AND individual performance are 50% or higher and the company is profitable.

26. ESOP Who, When, Where, Why? Who: Depends. Everyone? Admin? Senior team? When: At time of hire. Spot grants & annual top ups Where: Anytime after ESOP in place Why: Reward long term performance

27. ESOP How Much? Senior Management - % of company Non-founder CEOs - 8 - 10%Founder CEOs - 0 - 3%COO / President - 3 - 5%CFO - 1 - 3%CTO - 1 - 3%VPs 0.75 - 1.5% Team - % of base

28. ESOP Benchmarks

30. Valuable?

31. Unfair rules

33. Questions