Purpose
Goal: Attract and retain the first US-based executive.
Focus: Align pay with US market expectations, legal compliance, and multi-year success.
Risks of Poor Design: Turnover, non-compliance, and slow scaling.
Key Principles
- Prioritize entity setup, compliance, and cultural adaptation.
- Include long-term incentives to retain and align with multi-year success.
- Tie bonuses to measurable milestones; enforce compliance gates.
- Benchmark pay and benefits to US market standards.
Roles & Compensation
| Role | Base / Variable | Focus |
| First US VP / General Manager | 60% / 40% | Bonus for setup, compliance, hiring; LTI drives 3-year US success |
| US Chief Operating Officer | 50% / 50% | Variable weighted toward LTI; focus on multi-state operations & revenue growth |
| Long-Term Incentives | 1–4x base | Equity vests over 3–4 years; structured for tax efficiency & retention |
Levers:
- Annual bonus tied to US entity setup, compliance, and initial hires.
- Long-term incentives tied to US revenue growth, entity valuation, and return on capital.
- Benefits must include health insurance, 401k match, and relocation support.
Design Tips
- Engage: Board, US Legal Counsel, US Tax Advisors, US Compensation Consultants.
- Set objectives for:
- Legal & financial establishment
- Talent acquisition & cultural translation
- Risk mitigation
- Commercial readiness
- Legal & financial establishment
- Use measurable, binary milestones for first 12–18 months.
- Structure fixed vs. variable pay to attract US talent and align with global strategy.
Advanced Considerations
- Reward foundational US setup tasks before efficiency metrics.
- Require zero federal/state violations and successful initial hiring for any bonus or LTI.
- Align long-term incentives with 3-year US market entry success.
Common Pitfalls
- Underestimating US healthcare and benefits costs.
- Mismanaging US tax implications for stock options.
- Ignoring clawback and termination enforcement under US law.
- Benchmarking US roles but paying globally.
Executive Compensation Document Essentials
- Executive info, base salary, target bonus, target LTI, US legal jurisdiction.
- Fixed compensation and employment term, relocation clauses.
- US benefits schedule.
- Annual incentive plan tied to US setup, compliance, and talent acquisition.
- Long-term incentive plan with grant dates, vesting, and performance criteria.
- Clawback and termination clauses enforceable under US law.
- Sign-offs: Executive, CEO, Chairman of Compensation Committee.
