Negotiating my bonus

23 December 2002 by
Negotiating my bonus

Question

I have started my own limited company and shall be opening a bar. I have investors involved, and we are currently negotiating my bonus, as I will be solely in charge for at least the first two years. The investors are suggesting that the bonus is calculated on profit after all deductions, including capital payments and loan interest. I believe this is unreasonable and that my bonus should be a percentage of operating profit. What do you think?

What the expert says

Julian Bradwell, human resources director, Greene King Pub Company

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I do not think the investors are being unreasonable in reflecting capital investment and interest payments in any bonus payments. This would be common practice in many managed pub businesses. However, it should be possible for you to negotiate a solution that supports both yourself and the investors based on profit on short and long term returns.
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