Can people see how helping the business succeed helps them succeed?
You and your team need a shared understanding of the compensation plan: what work matters, what someone can earn and what supports that reward. Connecting pay to your company’s direction makes those expectations clearer.
Module 8 connects pay to the responsibilities and development work in Module 7. Begin with the actual people, roles and promises you have today. You can improve an existing arrangement without starting over.
Build three connected parts
| Milestone | The owner’s question | What you establish |
|---|---|---|
| M22 · Company-Wide Bonus Pool | What can the company fund, and how does that become an award? | A supported pool, participation and earning terms, communication and actual administration. |
| M23 · Short-Term Incentives | How does each current leader earn their annual compensation? | Agreed base pay and annual opportunity tied to responsibility, contribution and company funding. |
| M24 · Long-Term Incentives | Would sharing long-term value help the person and the business? | A supported participation decision, clear terms and a review of existing obligations. |
Base pay, annual incentives, long-term participation and owner distributions serve different purposes. Understand their combined cost and payment timing before making commitments.
Pay for results and the ability to sustain them
Number, System and Leader connects three contributions. The Number is the supported operating result. The System is the repeatable way the function produces it. The Leader is the person’s demonstrated ability to carry responsibility and develop others.
A revenue target can coexist with a commitment to establish a reliable forecast and delegate customer decisions. Each needs agreed evidence. The function and person assessments help identify useful work; their totals and the owner’s Velocity Score do not calculate pay.
The leaders also need to cooperate. Selling more work can damage delivery economics when the company cannot perform it profitably. Define the contribution each person can influence and the shared results the company needs.
Keep the overview, calculations and agreements consistent
The Compensation Blueprint™ summarizes the system. Your company’s financial model supports the calculations and cash planning. Participant agreements establish their actual terms. A change in one needs to be reconciled with the others.
For example, in a hypothetical plan, a 10% funding rate on a defined $1,000,000 pre-bonus earnings basis creates a $100,000 pool. A 15% share of that pool creates a $15,000 opportunity. Those percentages describe different things, and the opportunity still needs earning and payment terms. They are teaching assumptions, not required rates.
Test the complete proposal against the approved budget and a difficult-year scenario. Include employer costs, investment, debt and ownership cash needs. A larger pay package may help build the team you want while reducing near-term distributions. The expected benefit needs support.
Begin with one compensation decision
Gather current agreements, the leadership roadmap and the latest reviewed financial plan. Write: “The next compensation decision we need to make is…” Name the missing evidence, the people who need to participate and the next review.
The two-page Compensation Blueprint shows annual funding and pay on one page and long-term participation on the other. The Annual Bonus Pool Plan, Annual Compensation Plan and long-term tools develop the detail. Useful existing company records count. A completed worksheet is preparation for a decision and agreement.
Use the same Playbook throughout the year
Keep current compensation work in The Numbers / Executive Compensation, with protected individual agreements. Leadership records link the responsibilities and development work; The Rhythm holds dated decisions.
Monthly reviews explain actual results, expected awards, obligations and cash needs. Quarterly reviews address alignment and material changes. Annual planning establishes prospective terms alongside the budget. Preserve the agreement and original budget when the forecast changes.
M22 and M23 require adopted annual arrangements and actual use. M24 permits a supported decision against a new grant while accounting for existing promises. None requires a particular classroom percentage or automatically guarantees retention.
Choose your next step
Review the wider system. Use the Ownership Assessment to consider this capability alongside your goals, numbers and leadership work. Choose a useful priority from the evidence.
Bring the plan together with support. The 90-Day Boardroom Blueprint connects ownership direction, the financial foundation and decisions in a first usable Playbook. You can explore support directly.
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