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How to be inventive with compensation to keep key executives

September 22, 2017 Article 5 min read
Michael Krucker
Lacking large company coffers, middle-market and smaller businesses are using these six strategies to incentivize key leaders in a tight labor market while still preserving available resources. Read more at The Business Journals.

Small business owners discussing employee compensation at a laptop

Chief executives of Fortune 500 companies receiving lavish pay, including significant stock options and other forms of deferred compensation, have become commonplace. But now, with the U.S. labor market tighter than it has been in years, these incentives are being considered more frequently at middle-market companies and smaller firms across America trying to attract key staff by matching incentives at larger, public companies.

I hear a growing number of owners of middle market firms say that key staff are now requesting an ownership share in exchange for a commitment to stay at the firm. In one recent case, a CEO was approached by his chief financial officer seeking equity in the company, valued at $2.5 million — 10 times the CFO’s annual salary.

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