Communicate a sense of partnership with key producers
Most chief executives and owners envision a future company that is, in one way or another, bigger and better than the present business. The ability to achieve that future requires that employees—particularly key people—be compelled by that vision and are able to see themselves making a significant contribution to its fulfillment. As a result, most ambitious, forward-thinking companies seek to create this link with high producers by sharing value with those who help create it.
In private companies, this is most often accomplished through solutions such as performance unit plans, profit pools and phantom stock agreements. Public companies more commonly employ restricted stock, options or their variations to create the alignment they seek. Performance-based deferred compensation is another common tool both public and private companies use to drive results and inspire long-term value creation.
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