Business planning often revolves around the idea of “What’s in it for me?” Business owners usually want the kinds of planning that let them run, grow, and eventually leave their business on their terms. But rare is the business that can run, grow, and allow its owner to leave on their terms without support from key employees. To gather that long-term support, business owners likely need to incentivize those employees.
Consider the example of Donald Fowler, a fictional but representative owner, and how incentive plan choices changed the arc of his business planning.
If It Looks Like a Duck and Quacks Like a Duck . . .
Donald Fowler always said, “If it looks like a duck and quacks like a duck, it’s a Fowler!” Donald had found great success manufacturing duck-centric treats and training tools for dogs—professional show dogs, hunters, and mutts one and all. He employed 60 full timers, including his two key employees, Grover and Courtney.
Grover
Question: I’ve heard about long-term incentive compensation plans. Should I consider one for my business?
A: A long-term incentive compensation (LTIC) plan is a compensation package for key executives that includes base salary, short-term and long-term incentives and benefits. These plans are created as a reward system to incentivize performance, as LTIC plans are tied to individual goals and objectives instead of a company’s revenue or share price. LTIC plans can be advantageous for those participating. If your company is seeking to attract, motivate or retain highly qualified executive officers, an LTIC plan may be right for you.
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