Results 1 to 7 of 7

Thread: Owners salary

  1. #1
    Full Member
    Join Date
    Jul 2008
    Posts
    62
    Thanks
    11
    Thanked 0 Times in 0 Posts

    Owners salary

    Good to get back to the forum!

    A closed-corporation company is owned by three people who also earn their salaries for the work they do. One shareholder is 26 years old and have almost 7 years of industry experience and others have less than 2 years experience. I'm a well-known animator who have won lots of awards.

    One of the three partners pointed out that we all must start earning the same salary in due time... but I feel that it will be fair if the salaries are based on the experience and achievements (to be assesed by an independent HR) because the profit share is already equal. It will also urge us to go extra mile and grow with company. It will also benefit the company as a whole.

    What do you think?

  2. #2
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    20,977
    Thanks
    3,055
    Thanked 2,462 Times in 2,067 Posts
    Blog Entries
    12
    You're on the right track. However, it doesn't always go down that well if everyone has an equal ownership share.

    The pleasures of partnership, I'm afraid. It takes patient negotiating and being prepared to allow the occasional compromise some. Hopefully you will have healthy distributable profits. That always takes the edge off things.

    It's when things get tight attitudes tend to harden.
    The trouble with opportunity is it normally comes dressed up as work.

  3. #3
    Gold Member daveob's Avatar
    Join Date
    Feb 2008
    Location
    Amanzimtoti
    Posts
    655
    Thanks
    107
    Thanked 118 Times in 103 Posts
    So who should earn more ?

    1. the artist who produces the best work ?
    2. the salesperson who lands the big contracts ?
    3. the admin director who makes sure the invoices get to the right departments on time and chases up the clients for payments ?

    Fact is, you're all dependant on one another - without the expertise and strengths of each partner, there's less probability of success.

    I hope that others who have been in business for a few years will agree that a strong production department is not the sole reason that a company will stay in business - admin, marketing, accounts, packaging, delivery, etc all play equally important roles. One weak link in the chain and you don't have a chain anymore.

    And you may say that you could employ the expertise in the other fields as your job is the most important. But then so could the admin or sales directors simply employ a replacement for the production director's tasks.

    so who should earn more ? Time to take a closer look at why you formed that partnership in the first place.
    Watching the ships passing by.

  4. #4
    Full Member
    Join Date
    Jul 2008
    Posts
    62
    Thanks
    11
    Thanked 0 Times in 0 Posts
    Thanks for replies...

    Actually we are all artists...

    The company was founded with strong believe that there is market and need for the distinct quality in Visual Effects, Animation and Game Development.

    Every artist has their own strenghts and weakness. It is fair to say that I'm all rounder.

    One artist is hearing and two are profoundly Deaf. Actually were invited to do the pitches because of my showreel and people I worked with before. One hearing artist did all the talking, phone callings, presentations, etc... he really has got talent for talking bullshit to secure the jobs. Well, not really to secure the job, but the client was impressed with the work we pitched. I also work on the account, invoices and admin fronts.

    The current salary ratio between me and the other artists is 17:7. I believe we all can earn the same salary one day providing that it is proven that they are worth it. I worked really hard to get where I am now.

    I feel it is only matter of time...
    Last edited by anakin; 01-Aug-08 at 08:45 AM.

  5. #5
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    20,977
    Thanks
    3,055
    Thanked 2,462 Times in 2,067 Posts
    Blog Entries
    12
    Dave - you're right, or at least got a strong point. In this instance, however, it seemed we weren't dealing with that sort of skill division.

    But what you raise is worth exploring further. Apparently financial directors and marketing directors often earn more than the CEO in big companies (unless you are quasi-government where marketing isn't about selling, but fixing your public image). Any thoughts on that?
    The trouble with opportunity is it normally comes dressed up as work.

  6. #6
    Platinum Member Marq's Avatar
    Join Date
    May 2006
    Posts
    1,296
    Thanks
    73
    Thanked 283 Times in 216 Posts
    This has always been a thorny issue.

    When does one partner have more experience than another? Years doesn't necessarily equal experience. Awards may not mean better than the rest. So there is a fine balance of inputs into the pot that makes up a company. Often too many years (experience) can create a problem in new thinking, innovation and getting the job done. Economists call it the law of diminishing returns. (I just thought I'd throw that one in for those who listen to the economist point of view.)

    Then there's the age old argument of admin positions vs marketing vs Ops. So who should be paid more? Who contributes more? Reminds me of the story of who's the boss of the body where the arsehole won.

    Three partners = three points of view = a problem. Two partners also = a problem. Another reminder was my parents arguing as to who could drive better - Mom always said I have 50 years experience - Dad would say yes but you have only driven to the shops once a month and clocked up only 10k kms over your driving career.

    So define experience?

    Perhaps there's an argument for dependency. If I leave the Company and take my skills elsewhere, will the company fold or will the remaining partners be able to replace me. Sometimes this argument works but (in my experience - limited as it maybe) put your hand into a bucket of water - remove it and the hole that's left.....

    Good luck on this one.

  7. #7
    just me duncan drennan's Avatar
    Join Date
    Jun 2006
    Location
    Cape Town
    Posts
    2,642
    Thanks
    119
    Thanked 94 Times in 77 Posts
    If you are brutally honest with yourself, what drives this discussion? Does it really have to do with who contributes more, or is it about what I feel I need to maintain my life style? Is it about experience, or is it about believing you are more competent (or they are less competent)?

    Also, expenses (salaries) eat into the distributable profits and how do those get divided up at the end? Would you give your partners a higher percentage of the profits based on your higher salary? Or do you think that the profits should be divided up equally?

    Do you think creating a strong salary hierarchy will help you all to achieve more or less?

    Who is taking the most risk? How are they compensated for that?
    [SIGPIC]Engineer Simplicity[/SIGPIC]
    Turn ideas into products | The Art of Engineering blog

Similar Threads

  1. how do you deal with a business loan from the owner(s)?
    By SilverNodashi in forum Accounting Forum
    Replies: 16
    Last Post: 28-Mar-11, 01:39 PM
  2. Salary increases
    By Dave A in forum Business Finance Forum
    Replies: 4
    Last Post: 09-May-08, 04:44 PM
  3. SEO Tips for small business owners - Matt Cutts
    By Dave A in forum Technology Forum
    Replies: 2
    Last Post: 18-Dec-07, 08:52 PM
  4. Squirrels and Small Business Owners
    By Debbiedle in forum General Business Forum
    Replies: 2
    Last Post: 27-Nov-06, 12:07 PM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •