Incentive Plans
Management Bonus Plans for Emerging Businesses
by Chris on Mar.18, 2009, under Entrepreneurs, Incentive Plans, Venture Investing
Fred Wilson (one of my favorite bloggers) just published this blog post about right and wrong ways to implement cash bonus plans for management in emerging businesses. A couple of my takeways: (1) equity incentives should still comprise the bulk of the total incentive package, since equity incentives more closely align the interests of management with investors, and (2) cash bonuses must be carefully crafted to create the proper long term incentives (and Fred suggests a multi-year plan tied to incremental EBITDA growth as a good option).
