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0 8000 If you choose to add performance conditions to your Westing, please ensure that the performance
8000 11920 matrix is simple and easy to understand.
11920 16480 You could link them to company performance or individual performance or a combination
16480 17960 of the two.
17960 23720 For senior roles, it is better to use either only company performance parameters or if
23720 30640 you should use individual performance, assign a much higher weight to the company performance.
30640 33280 For junior roles, you might do the opposite.
33280 38640 Either only individual performance or a much higher weight attached to it.
38640 43380 Depending upon your long-term objective, you might even consider everyone linked only
43380 45560 to company performance.
45560 51200 The message you send out here is that the fortunes of everyone ultimately depend upon
51200 53240 the fortunes of the company.
53240 56160 So we all sink or swim together.
56160 58500 We all have one not-star.
58500 63760 Let us focus on how the company performs overall and not how you perform individually.
63760 70880 Again, this will depend upon how your work is structured within your company, the interdependencies
70880 76640 it has and the work culture you have decided to create based upon your vision.
76640 82520 You may consider a scale or ranges of performance rather than a binary performance matrix.
82520 85880 A binary matrix would mean a yes or a no.
85880 92320 If we hit this number, the options west, if we are shot by even one, nothing rests.
92320 97840 A range, on the other hand, means if we reach between this and this, then 100% of those
97840 99380 options rest.
99380 106000 If we reach between 90 and 100% of that number, then only 80% options rest and so on.
106000 111500 You should have a reasonable minimum below which nothing rests.
111500 115220 You may not waste all the options based on performance.
115220 120540 Some could waste only on tenure or continued employment with the company.
120540 123860 You see now we are talking about multiple layers.
123860 128620 The challenge is to balance fairness with simplicity.
128620 131100 So try a few alternatives.
131100 136620 Consider how each fits with your long-term objective and then make a decision.
136620 138580 Here are a few examples.
138580 141100 Let's start with the simplest.
141100 146860 Standard options granted with the 10, 20, 30, 40 Westing but all options west only on
146860 150460 tenure, no performance condition.
150460 154980 Second, all options west on performance.
154980 162140 Third, 100 options with the 10, 20, 30, 40 Westing but 70% options west on performance
162140 165100 and 30% west on tenure.
165100 172260 So after the first year, when the first 10 options are due to west, three of them will
172260 174940 west automatically due to tenure.
174940 180780 There is the balance seven would west based upon some performance parameters.
180780 184940 Now that performance condition could have more layers.
184940 189180 Is everything linked only to the company performance or is it also split between company
189180 192820 and individual performance in a certain proportion?
192820 198100 What weights are assigned to company performance versus individual performance?
198100 202980 And the last layer is the performance matrix structure.
202980 208500 Is it a yes, no binary kind of a matrix or is it a range matrix?
208500 214500 So you could have 10 options due to west in the first year but seven of them west based
214500 221060 on performance which is then split as 50% individual and 50% company performance.
221060 226220 But individual performance has a scale that says that if you achieve the highest rating
226220 237140 A, all of that 50% chunk, if B, then 75% of those 50% options west and so on.
237140 243100 The company performance could have a similar range with respect to company parameters.
243100 246420 Be careful about adding layers.
246420 251940 Add new layers only when you are absolutely convinced that you must do it because it
251940 257260 furthers your long term objective or the culture you are trying to create.
257260 259940 Simple is always more beautiful.
259940 263340 You could also create milestone options.
263340 269140 As the name suggests, these do not west annually or quarterly but west only on meeting a certain
269140 272660 milestone or an event occurring.
272660 277980 This might sound very interesting but be very very careful about these.
277980 284700 Use them only if you can define your milestone really, really, clearly and objectively.
284700 289020 The milestone need not be the achievement of an entire product or the discovery of a
289020 290340 molecule.
290340 296900 It is a milestone so should be a certain critical and a very clearly definable stage you reach
296900 299220 in your journey.
299220 303220 Creative milestones are better than subjective milestones.
303220 309300 So you could west simply based on continued employment or west based on performance.
309300 314340 Choose whatever fits best with your vision and the culture you wish to create.
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