Slicing Pie

            Advisory Board Members

            Because advisors are usually successful people who may have acquired some wealth, they may have unusually high fair market salaries. So high, in fact, that it may not be practical to pay them such a high rate. I recommend capping their hourly compensation at 200 slices/hour and asking them to contribute at least ten hours before cutting them in. For this, they enjoy the benefit of being immune to termination as described above.

            Unless there were extenuating circumstances, you wouldn’t be able to fire an advisor who took the capped hourly slices option. You would simply stop going to them for advice and they would simply stop earning slices. However, you would not be able to erase their slices if you fired them. So, when it comes to advisory board members, there is rarely such thing as termination for cause. Advisors would typically keep their shares with the multipliers.

            However, if they told you they no longer wanted to work with you, this is the equivalent of resignation for no good reason and you could recover their shares.

            If the advisor does not want the slices cap you have the option of giving them a rate that more accurately reflects their market rate, but they wouldn’t enjoy the benefit of protection against termination. 

            Updated: 04 Apr 2016 11:21 AM
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