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Looking for input on incentive compensation for employee who generates advertising in a publication. Co is private.

As the CFO of a small medical journal publisher I need to advise the President on a comp plan for an employee who generates advertising for the publication. He works with the advertising agencies to do so but his role is much larger in that he is also "VP of Global Business Development". He assists in opening new geographic markets for the Journal and is also responsible for developing new applications (i.e. creating the electronic version for the iPad etc). This is an 8 person company and privately held but very profitable. He is currently receiving straight salary.

Answers

Mark Stokes
Title: CFO
Company: Private
(CFO, Private) |

You have two items here: he brings in revenue and he hit operational objectives. The most straightforward suggestions would be commission or bonus on sales and MBO bonuses for things that are company objectives. The sales commission/bonus could be straight percentages or a scale based on sales achievement. Or you could give him a cliff - 0% until $X, then 10% on all sales to date. Or you could make comp based partly on his sales and partly based on company-wide sales to help him drive his direct sales plus support the rest of the company's efforts.

The MBOs can be bonus per objective reached, or %'s based on how well they were achieved or you can score each MBO and cliff him until a certain # of MBOs are hit.

The important thing, given that you asked this question, is that the employee feels appreciated and rewarded for his success (and those are separate items, BTW) for his part, and for the company's part, you want to ensure that you are not just paying for regular performance, but rather that you are rewarding superlative or extra performance.

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