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How do you properly compensate an active & effective Chairman of the Board?

Profitable $50M+ consumer products company experiencing 30%+ annual growth. Chairman of the Board is an original investor without whom the company wouldn't have made it through the trial & error startup phase. He is active and effective - we are trying to determine how best to compensate him now for his past and current service. He currently owns / controls a decent minority interest and isn't going to be motivated by small equity/options grants.


Topic Expert
Malak Kazan
Title: VP, Special Projects
Company: ERI Economic Research Institute
(VP, Special Projects, ERI Economic Research Institute) |

For non-employee Chairman, in addition to traditional retainer, fees, and equity grants, I have also seen matching contributions or direct award to Chairman's charity, deferred compensation plan with preferential rates, a defined benefit plan, equity grants that immediately vest. I would identify some peers and look at the proxy statements to see how their Chairmen are paid and ratchet it up from there to the higher percentiles given the exceptional performance of this individual. Hope this helps.

Keith Johnson
Title: Principal
Company: Keith E. Johnson CPA PA
(Principal, Keith E. Johnson CPA PA) |

Don't pay too much. That's what got us into this mess with capitalism breaking down due to greed.

Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

Here's a silly question - Did you ask him?

Sometimes knowing what the person wants and coming up with a compensation package around that desire is more effective than saying "here's our offer".

Case in point we had a highly compensated individual who just wanted a salary, vacation and a specifically defined bonus annually for the life of his contact. Ownership wanted him to have an incentive plan.

He left.


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