Now the fission venture capital company has been established and entered the incubation period. The key person in this is the general manager of the enterprise, whose shares are at least 10% (as much as 15%), which is fine at the beginning, but once the project is profitable, the general manager who pays the most will get too little.
In order to better motivate the entrepreneurial team, Andrew Zong designed a unique dividend model: the separation of equity and income right, that is, giving up the maximum income right and supplementing the equity of the entrepreneurial team with dividend right.
That is, if the new company is profitable, the annual after-tax profit will be divided into 50%, 30% and 20%.
50% of after-tax profit will be distributed to all shareholders according to the ownership structure, and this will be distributed to all shareholders according to the proportion of shares, so that the general manager will have at least 5% of after-tax profit (calculated by at least 10% of shares).
30% of the after-tax profit will be used as the rolling development fund of the enterprise, which will be invested in reproduction and continue to grow and develop. If the fission company has sufficient financial strength and talents, it can split again as the case may be.
20% is the management bonus of the senior management team. If you are not the executive shareholder of this project, you will not get this part, and this part of the income will be distributed by the general manager. In principle, the general manager can get half of this part.
Therefore, the general manager is entitled to 15% of the profit, that is, with 10% of the equity, he enjoys the right to 15% of the income, and the actual income of the general manager of the startup company is the person who benefits the most from this company. In practice, the general manager usually doesn't get 10% of the management dividend, and gives more money to his senior management team (including those who are not executive shareholders).
The subtlety of this model is that the general manager and his core senior management team have both equity and income rights, and the model itself has the nature of gambling. If you can't make a profit, the startup team can't enjoy the extra income right, so the startup team will keep the profit in the operation.
Andrew Zong: When the company went bankrupt, he lost all his property. We just lack110. We also have standards for choosing a general manager. He must invest his net assets before we hand over the company to him.
There is a special situation in practice, that is, under such a distribution mechanism, if the general manager and the senior management team still feel that the distribution is not enough, what should they do?
Don't worry, in the next chapter, we will talk about the solution in this situation: gambling!