"Value-Sharing" with Key Producers Becoming a Strong Focus of Growth-Oriented Businesses
Irvine, CA, September 07, 2013 --(PR.com
)-- Modern business is obsessed with innovation and securing the talent that will give it a competitive advantage, according to Tom Miller, president of The VisionLink Advisory Group, a compensation consulting firm headquartered in Irvine, CA. As a result, growth-minded companies seek to build value propositions that will attract entrepreneur-oriented “catalysts.” By and large, that requires them to find effective ways of sharing the value those people help create, the firm leader said.
“Catalysts are individuals who used to be in the garage creating their own businesses and would subsequently go out and creatively disrupt larger players,” Miller explained. “Now, they’re being hired by existing companies that want to stay ahead of the innovation curve. However, to attract them, a business has to offer those kind of people something that makes them feel like owners. They want a piece of the action.”
Given the importance of this issue to so many businesses, VisionLink will be broadcasting a free webinar on September 24, 2013 entitled, “Long-Term Incentive Plans: Which is Right for Your Company?” (More information and registration for this event can be accessed at: http://www.vladvisors.com/business-growth-strategies/event-details.aspx?ID=117.)
According to Miller, many organizations—especially private companies—assume they need to share stock to attract exceptional talent. The compensation expert explained that equity sharing may be necessary in some circumstances, however more often than not there are better options.
“There are many alternatives to equity sharing to meet this kind of need,” the VisionLink founder said. “In reality, when ‘catalysts’ ask for equity what they are really saying is they want to participate in the growth they help create. They expect there to be something that defines the financial partnership they will have with the company—long term. That may be stock but it could just as well be phantom equity, a profit pool or some kind of strategic deferred compensation plan.”
Miller went on to explain that there are about nine different types of long-term incentive or value-sharing arrangements a company can consider. “Ultimately, the organization needs to know the right questions to ask to determine which plan is best suited to its situation. They need some kind of ‘decision tree’ process. Asking the right questions helps you eliminate certain plans and gravitate towards others.”
The firm leader went on to say that the webinar broadcast on September 24 will introduce attendees to such a process. “We’ll also talk about all nine types of long-term incentive plans that companies might consider and how they each work. It will be an ideal primer for anyone dealing with this issue.”