Retaining key employees without equity

I’ve been that key employee that was instrumental in growing a family business only to hear the “dangling carrot” about stock options one too many times. There’s a better way

Most employees embrace a company’s culture. That’s the #1 way to attract and retain employees. If it’s not there today, build it.

If you have a high performer, eventually they’ll want more than just a salary, bonus, and token merit increase.

I’m also very stingy on equity. I advise clients to avoid using equity/stock options as retention tools in private businesses.

Consider the following approaches:

– Profit sharing into company account with generous vesting

– Phantom options – not as hard as you may think

– Non-monetary gifts (i.e. trips, adventures)

It doesn’t have to be complicated to retain without equity.

Do it before they leave, not regrets afterwards.

Rich Hall

Business Coach

Originally Published on https://www.richhallgroup.com/blog

Rich Hall Certified Exit Planning Advisor | Business Advisor | Baby Boomer

Rich is a Certified Exit Planning Advisor (CEPA) and business advisor with substantial experience in business coaching, advising, leadership development, business valuation, value acceleration, succession planning, and more. Rich is also a certified Baby Boomer!

​He is a member of Silver Fox Advisors, facilitates CEO Roundtables and nationwide mastermind groups. He was recognized as one of the Top 15 Coaches in Houston in 2022.

​Rich earned his undergraduate degree in Management Science from Georgia Tech, his MBA from the University of Houston, and his CEPA certification from the Exit Planning Institute.

He is the proud father of three sons, Jeremy, Mark, and Daniel, the grateful husband to his wife Jamie, and best friends with Bucky and Riley (dogs).