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Should everyone in a company reap the benefit of a sale?

Dave, I've been reading a lot of buzz back and forth about the sale of contractor-built companies like Weblogs Inc., and am wondering what you think about how far down the corporate ladder the benefit of a change in ownership should travel. I'm of the opinion that full-time salaried employees should see a percentage of the sale based on their percentage of ownership, but that's as far as I go.


Dave's Answer:

I've been talking about this with some colleagues of mine, so it's a very timely question.

Let me start by sharing my own experiences as an entrepreneur who has sold multiple companies, each of which has had joint ownership and employees or contractors. I have always done my very best to ensure that everyone I work with shares in the upside of any success I've seen, whether it be a secretary, programmers, or even consultants or Board members who have been there to help advise me.

With that perspective, it should be no surprise that I find it a wee bit upsetting when it appears that the head of a company is going to cash out on a change in ownership, without sharing any of the upside with their team, regardless of the terms of a contract or similar.

Having said that, let me clarify that I'm not proposing that you should give a bonus to the janitor and if you hire someone through CheapLogoDesigns to redo the site a few days before The Call comes in, you really don't need to be sending them a new plasma TV as a bonus. But if you do nothing, particularly with a contractor-built company like Weblogs, Inc., I believe that it's like the editor of a magazine cashing out without ever acknowledging that it's the writers that produced the content that allowed the magazine to exist in the first place. It's greedy.

Make sense?

Of course, everyone can travel their own path in business, and I have definitely worked with people who have not just burned bridges behind them, but left a definite trail of napalm and skulls. But industries have long memories in my experience, and I believe that the extra effort and, yes, sometimes extra payments to ensure a greater level of happiness is always worth the effort and cost.

It's just good karma.



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