#404: Design a CEO Compensation Plan Tied to Your Cash Flow & Equity Valuation Goals with Craig Rutledge

In this episode of Independence by Design™, Ryan Tansom is joined by Craig Rutledge, an expert in compensation strategy and the Partner at VisionLink. Craig offers valuable insights for growth-oriented business owner-operators looking to step back from daily operations and hire a CEO who can drive both cash flow and equity growth. He addresses the critical need to design compensation strategies that align the goals of the owner with those of the leadership team, ensuring that the owner can manage the company from an ownership perspective without worrying about the stability of their income from distributions or the growth of the company’s value. 

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Craig discusses how to structure compensation plans that not only attract premier talent but also ensure that these leaders are motivated to make decisions that support sustainable cash flow and increase equity valuation. By linking short-term and long-term incentives directly to the owner’s financial goals, Craig helps owners confidently step back from the day-to-day operations, knowing their company is in good hands and positioned for growth. This episode is essential for business owners who want to replace themselves in operations while maintaining control over their financial future. 

Craig Rutledge is the founder of VisionLink, a leading expert in compensation strategy with over 25 years of experience. He specializes in helping business owners align their leadership teams with their financial goals through innovative compensation plans. Craig’s expertise empowers owners to step back from day-to-day operations while ensuring sustainable cash flow and equity growth. His work has guided countless companies in securing long-term success. 
 

Chapters:  

• (00:00) Introduction and Background 
• (04:50) Craig Rutledge from VisionLink delves into executive compensation strategies 
• (07:05) Drafting a compelling compensation philosophy statement 
• (12:30) Recruiting and retaining high-level executives amidst compensation challenges 
• (18:57) Short-term bonuses and long-term equity growth plans 
• (24:42) Importance of aligning compensation with working capital and EBITDA 
• (29:00) Phantom equity plans versus actual equity  
• (35:00) Structuring executive compensation plans 
• (43:00) Structuring compensation to align with strategic business objectives 
• (53:00) Structuring short-term CEO compensation plans 
• (1:00:27) Designing incentive plans for business success 

Ryan Tansom is a seasoned entrepreneur, speaker, and the founder of Independence by Design™, a transformative ownership framework for growth-oriented business owners. After turning around and selling his family business in an eight-figure exit, Ryan spent over a decade dissecting the lessons learned from his journey. His mission is to help other business owners avoid the pitfalls he encountered by providing them with the tools and knowledge to align their business operations with their personal and financial goals. 

With a deep understanding of the challenges faced by owner-operators, Ryan developed Independence by Design™ to empower owner-operators to create sustainable cash flow, grow their company’s equity value, and achieve true independence. He has shared his insights on hundreds of stages, including Vistage, EO, and industry associations, and has reached over 500,000 listeners through his podcast. 

Ryan is passionate about helping business owners get unstuck from the day-to-day grind and design a business that serves their life, not the other way around. 

Resources: 

Craig Rutledge LinkedIn https://www.linkedin.com/in/craig-rutledge-6a32a69/ 

Craig Rutledge’s company specializing in compensation strategy and planning - VisionLink https://visionlink.co/ 

Book: "Drive: The Surprising Truth About What Motivates Us" by Daniel H. Pink 

Book: "The E-Myth Revisited" by Michael E. Gerber 

Independence by Design™ Owner’s Workshop https://ryantansom.com/independence-by-design-workshop 

Independence by Design™ Ownership Coaching: Ryan Tansom’s Ownership Accelerator programs and coaching https://ryantansom.com/coaching 

Ryan Tansom Website https://ryantansom.com/ 

Ryan Tansom LinkedIn https://www.linkedin.com/in/ryantansom/ 

Ryan Tansom Twitter https://twitter.com/RyanTansom 

Ryan Tansom YouTube https://www.youtube.com/@ryantansom 

Ryan Tansom 30-Minute Ownership Strategy Call https://calendar.app.google/tsKk7z6ohugDchWq8