Questions

I own a specialized industrial equipment manufacturing company which I started 20+ years ago and has done quite well. Our sales and growth have stagnated over the past few years primarily which I think is due to : #1. Being 'home-grown', we have lacked professional marketing/sales and have primarily depended on referrals, online (Google etc.) marketing & a few print ads in trade magazines. #2. Over the past few years I have spent lesser and lesser time at the company with zero efforts towards new marketing channels etc. Recently we were approached by a very talented individual who operates (CEO) a similar but unrelated niche manufacturing company. I believe he could take our company to the next level as he has done at his existing company. Of course no guarantees but I am willing to set aside the considerable cost associated with this endeavor for a year or longer, assuming I see some ROI within a year. Which brings me the to the question above!

I'll divide your question into 2 questions, because I am not sure which one you're really asking :-)
1. Should I hire him despite the costs involved? You seem to already agree to this, based on what you wrote ("I am willing to set aside...assuming I see some ROI...").
2. How to I justify his high salary to other employees?
A few options:
a. You don't tell them.
b. The CEO's compensation can be structured in a way that his 'salary' isn't that high (and this is what the other employees will see - so no problems), and he gets a large bonus based on results (which could be measured within 6 months and then 12 months). This is also better for you seeing that you don't know how good is will be. Additionally, if he is so confident he can do the job, he shouldn't object to that structure.
c. Make it clear to your employees, that if he manages to generate more income for the company, they too will benefit from it (end of the year bonus/increased salaries/holiday gifts?).
d. the tough option: tell them that if you don't make some hard choices, there won't be a company for them to work at down the line (due to the yearly decrease in profits)
It's your company (which you seem to have managed successfully), so I am sure that you know what would work best with your employees.
I'm happy to help you construct the employment contract with the potential adviser.
Good luck
p.s.: let me know how things turned out. I'm curious :-)


Answered 7 days ago

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