Ask the headhunter

F.F. asks:

I’m the CEO of a deep-tech startup. If everything goes according to plan, we’ll be bringing our first product to the market in the second half of next year. For the last two years, we’ve been working with a business developer who has deep knowledge of our technology and a vast network in our industry. Now that the market launch is imminent, we want to expand this collaboration. We’ve already mutually agreed on the payment package.

Because of the size of the deal, we have to submit it to the board. With a fixed annual remuneration of 130,000 euros and a bonus that can rise to the same amount, the total package is quite bulky. From what I hear from the board, I gather that it’s at the upper end of the market.

Frankly, I believe I’ve negotiated a great deal. He’s turning in his already-acquired stock appreciation rights (SARs) and in the process is taking a stake in the company for a few hundred thousand euros. He’s effectively partially paying for his first bonus himself.

I’m looking for support to get the deal past the board. What’s your take on this?

The headhunter answers:

The package I’ve seen is definitely very nice and certainly not excessive. All amounts are based on a fixed gross monthly fee and the bonus is also a gross figure. The business developer will be working as a consultant and not as an employee, which means that you won’t have to pay the employer charges of 30 percent, nor any of the additional expenses like vacation pay and pension.

When he started two years ago, he already settled for a significant pay cut as compared to his previous earnings as a country director at a leading international technology company. Converted to a salary, his new fee will still be below the range you’d normally expect for such a role.

As for the bonus, he hasn’t received an extra payout since he started at your company. Moreover, he can’t claim an initial bonus until 18 months from now, subject, of course, to the condition and to the extent that he performs properly, ie achieves his revenue targets. The maximum bonus being equal to the fixed annual fee has a bit of an American feel to it but it’s very effective in promoting sales and certainly not excessive either.

You’ve certainly negotiated a more than decent deal. My compliments for having him relinquish his already-acquired SAR package, which has a current value of around 100K. Getting him to invest is even more impressive. Besides, whatever the criticism, you can’t amend your agreement with him and serve up additional conditions or a reduced payment package without seriously damaging the relationship.