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WHY SHOULD I GIVE UP A DEAL THAT PAYS SO WELL? When I joined this company six months ago, I negotiated a deal where part of my pay would be performance-related, depending on new business I brought in.

by Jeremy Bullmore
Last Updated: 31 Aug 2010

 I've been more successful in this than expected, and my pay will soon top that of my boss. He doesn't know I know this, and has asked me if I'll agree to decrease the proportion of my salary that is performance-related so that it's more in line with other employees. I'm sure that it's actually because he doesn't want anyone to earn more than him. Should I confront him with this and refuse to change my set-up? The money itself is not that important to me - it's the principle.

Here's another question of principle, and I think I'm going to suggest another sliding scale. I don't suppose you'll warm to this advice, and a lot of other people may disagree with it quite vehemently, but here goes. Performance-related pay formulae sound wonderfully objective and defensible. If a person contributes way above expectations to neatly measurable factors such as revenue or profit, why shouldn't he or she benefit by the agreed proportion? After all, the firm is better off as a result.

The trouble is: luck, chance and unforeseeable events. No formula can factor in every possible eventuality. When a CEO's bonus is based on share price and the company is then on the receiving end of a deeply unwelcome hostile bid, the share price will soar; and he has every contractual right to claim his millions. But the whole world knows, and he knows, too, that something's wrong. It is even possible that the company became vulnerable to this bid precisely because of a recognised weakness in leadership.

If he brings in the lawyers and insists on his rights, he'll probably win the day, but key management relationships will be poisoned for ever. A principle has been honoured, but at considerable cost.

I've no idea how much sheer chance contributed to your stellar performance. You may well feel none. But it is most unlikely that your company expected that the performance-related element of your income that you negotiated would push your pay to such stratospheric heights. You may be right to suspect that your boss dislikes the prospect of anyone earning more than he does, but there are also quite respectable grounds for having pay scales roughly related to scales of responsibility.

You say the money is not the real issue. In that case, why not show yourself to be a person of real principle rather than one clinging to a legalistic formula in the name of principle - and sort it all out amicably with your boss? I'm prepared to bet that, in the longer term, you won't even suffer financially.

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