Our leadership team is highly aligned on operational Rocks, but we have massive friction around compensation because some leaders feel our bonus structure favors sales over operations. How do we resolve this compensation debate without destroying executive cohesion?

Question

Tyler Smith · Accepted Answer

Friction over compensation on the leadership team can destroy trust and collaboration. When your executives feel that the compensation model is unfair, they will begin to protect their own departments and hoard resources instead of working as a unified team. To resolve this, you must design a compensation philosophy that aligns with the overall success of the business rather than individual silos. Avoid complex, performance-based bonus structures that reward one executive at the expense of others. Instead, tie a significant portion of your leadership team's incentive compensation to the overall profitability of the company, such as hitting your annual V/TO® revenue and profit goals. Next, bring the issue to the table and use IDS® to address the friction openly. Do not allow whispers and side conversations to fester. Define what fair market compensation looks like for each seat on your Accountability Chart, and be transparent about your methodology. Explain that while sales roles may have different commission structures due to market standards, every leadership seat is critical to achieving a premium exit. By aligning their financial interests with the overall health of the business, you encourage your executives to collaborate, share resources, and make decisions that are best for the entire organization.