Opinions on Comp/equity package for an inexperienced Operator

by a searcher from University of Oxford

10 months ago

Recently acquired company offered me a role as Operator. I’ll be working along side new Owner who is starting a holdco. This is the first acquisition. 

My experience: ~4 years of sales in same industry, young, never operated before. Also on table for me is MBA offer + MBA internship in searchfund. Career goal: become my own owner/operator in ETA (ofc)

Offer has a 10 week trial, then full time. 
 
Company: Rev is ~950k with 15% margins (many inefficiencies in the business ops)

Yr 1 goal  is ~950k with 20% - 30% net margins

Comp is as follows: 
80k base (5k benefits)
Bonus 1: If yr 1 goal met with 20% net margins, 20k bonus (bonus not part of net margins)
Bonus 2: if yr 1 goal met with 30% net margins, 30k bonus

Total comp is 135K

Equity:
3% four years vested
3% $3M organic rev @ 30% margins
4% $5M organic rev @ 30% margins
5% $8M organic rev @ 25% margins
5% $10M organic rev @ 25% margins

Total 20%

Thoughts? Is this common?
What is worth negotiating?

0 likes
109 views
7 comments

investor from University of California, Berkeley - Haas School of Business

I would pass and go straight to your own search. Comp is low and the probability of hitting these targets is risky.

10 months ago | like reply | 1 like

searcher from Columbia University

MBA + traditional route will get you where you want to go faster. You have to 10x this business to get 20% of the equity. No thanks.

10 months ago | like reply | 0 likes

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