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who got you there.<\/em> \u00a0And for tax reasons, remember them before the closing of the deal, so that you can do so by sharing a bit of your proceeds without paying personal income tax upon those amounts.<\/p>\nFormal option plans for some<\/strong><\/p>\n Some companies, especially those financed by angel or VC investors, have good, formal stock option plans with properly priced options set to reward all employees and managers in the event of a corporate sale.\u00a0 Usually, the higher the ranks, the more the options held and therefore the greater reward at exit.<\/p>\n And a lack of plans for others<\/strong><\/p>\n If there have never been outside investors to organize such an option program, many CEOs never get around to creating a system for rewarding employees in a sale.<\/p>\n I found myself in such a situation upon a sale of my computer software company.\u00a0 There was no question that each of the five vice presidents had been greatly responsible for our success and getting us to the successful exit.\u00a0 Yet there was no formal reward in place other than the employee stock ownership program (ESOP) which was set to pay all employees for their accumulated shares at the exit.\u00a0 So, I wrote into the final distribution instructions a surprise five figure bonus for each of the five executives.\u00a0 Each was surprised, pleased and effusive.\u00a0 Upon reflection, I should have given each even more.<\/p>\n Consider the kinds of exits<\/strong><\/p>\n The marginal exit is most difficult, and it would be rare for an entrepreneur to willingly share with other managers. \u00a0But the exit we celebrate, the one where the returns will change our lifestyle, are the exits where the founders with the most gains should consider how they got to this point. \u00a0We should all recognize that we did not do it alone, and that even generous stock options may not well-enough reward those who are direct reports and have done the most amount of heavy lifting. \u00a0Why not consider a surprise addition to the payout from your (perhaps) most-generous portion for those important contributors to success?<\/p>\n It is rewarding and more than fair to share the success with those who got you there.<\/p>\n","protected":false},"excerpt":{"rendered":" So, you are close to selling your company, and counting the profits a bit early. Well, that\u2019s human nature. Here\u2019s a thought for you to recall later when and if the event happens. \u00a0Remember those who got you there. \u00a0And … Continue reading ![\"\"](\"https:\/\/berkonomics.com\/wp-content\/uploads\/2018\/11\/sales-success-2.jpg\")
[ Email readers, continue here…]<\/em> <\/span>Now, there are three kinds of exits. \u00a0Those that pay off handsomely (congratulations if so), those marginal exits that selvage technology, brand and jobs \u2013 better than nothing. \u00a0And those that are total write-offs in which no one except perhaps the bank and lenders receive anything.<\/p>\n