SHOULD I GIVE SELLER A SALES-BASED EMPLOYMENT AGREEMENT POST-CLOSE?

Hi all - I am working with a seller who would like to remain within the business post-sale in solely a Sales capacity. The business relies on revenue from an initial installation and then recurring service revenue, so a heavy piece of his role going forward will be to maintain current accounts and retarget a robust contact list.

I am curious whether anyone has experience structuring these types of employment agreements to keep the seller motivated and reward them for upside and their learnings. I am charting realistic revenue/earnings scenarios and the resulting different base:commission ratios, while also ensuring sufficient cash flow for investment into the business. I am also looking at a tiered commission structure. They are not open to a 100% commission agreement at this time.

Open to thoughts and appreciate your time.

Scott



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