One of the most significant issues facing Family Offices today is how to retain their senior executives and one of the key issues is compensation.
The typical senior executive has been compensated by receiving a salary and discretionary bonus, similar to the other employees, however at a higher level. What has become more common today, is to implement a model that offers the key executives a performance based compensation plan.
With the shortage of family office leadership professionals, it is essential that you take a comprehensive approach to recruiting, motivating and retaining key employees.
The performance based model can be complex and we suggest that the program be developed with the executive rather than for the executive. Some of the plans may include structuring a carried interest or “carry”, which is a share of the profits. Another method may include allowing the executive to co-invest along side the investor (take a minority investment).
For more detailed information on how to develop a comprehensive plan for retaining key executives in your Family Office, please contact: Michael Rosenblatt, President of FON Search and The Quest Organization at: michael@questorg.com or 212-971-0033 x 313.
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