What is the right ratio of sales and customer handling staff VS other staff?

Please resist the urge to pull the band-aid. I'm not a fan of keeping a poor performer, but unless this person is a behavioral or "for cause" termination, he deserves some professionalism here. 30-day Performance Plan, make the goals aggressive and stick to it - he can consider that his head start to either buck up or start searching. Remember, your other employees watch how you treat their former colleagues. A quick termination before a holiday is prickish, an aggressive performance plan is taking care of business.

It's great that this employee has been transparent about the fact another company wants him. The problem is that this employee is ambivalent about his connection to your Company. Really, under 100 employees at least, this is unacceptable. I would first reflect on why you think he's looking elsewhere. Then, I'd ask him that, admitting that you have failed to create an environment in which he has stayed engaged and motivated on what he's working on. If his answers seem reasonable and you can commit to making the changes necessary, then you won't need an employment contract, he'll stay on his own desire, because you listened to him and improved his situation. If his requests seem unreasonable or you know you won't be able to make those changes, fire him *today.* This situation can contaminate your entire company quickly. Yes, swapping someone out will always be a bit of a setback, but you want *everyone* on your team, feeling motivated and excited by what they're doing. It sounds like you're making your decision out of fear (having to find and hire another engineer) versus what's best for the Company, long term. Happy to talk to you in a call. Problems like this are within the sweet spot of my skills and passion.

Almost all my clients have the same issue as yours. So your challenges are not unique. While making positive business progress is a wonderful thing, external growth must come with relevant similar pace of internal growth. It seems that you are using the same old management approach/ style despite your business has grown from 1 or 2 people into current size. It is no more purely a number game now, mismanaging people will lead to loss of knowledge, valuable customer, profits, and growth potential. Your backyard is having fire currently means your internal support team is having some challenges and you may have uneven growth in some business functions - immediately you should investigate the following areas: 1. Review your management approach/ style and system 2. Review whether you are capable to manage C-level employees. 3. Review your human capital policies and culture diversity 4. Review, whether you have clear/ appropriate a) accountabilities, b) roles and responsibilities, c) committed budget, d) monitoring and control system, e) KPIs, etc 5. Revisit your mission/ vision/ expectations, adjust if necessary. 6. Review workflows and communication models to identify what has triggered the conflict(s). I think the above should help. Upon making the reviewing, you may already have action plans. If you still have problems, feel free to drop me a message

I'll divide your question into 2 questions, because I am not sure which one you're really asking :-) 1. Should I hire him despite the costs involved? You seem to already agree to this, based on what you wrote ("I am willing to set aside...assuming I see some ROI..."). 2. How to I justify his high salary to other employees? A few options: a. You don't tell them. b. The CEO's compensation can be structured in a way that his 'salary' isn't that high (and this is what the other employees will see - so no problems), and he gets a large bonus based on results (which could be measured within 6 months and then 12 months). This is also better for you seeing that you don't know how good is will be. Additionally, if he is so confident he can do the job, he shouldn't object to that structure. c. Make it clear to your employees, that if he manages to generate more income for the company, they too will benefit from it (end of the year bonus/increased salaries/holiday gifts?). d. the tough option: tell them that if you don't make some hard choices, there won't be a company for them to work at down the line (due to the yearly decrease in profits) It's your company (which you seem to have managed successfully), so I am sure that you know what would work best with your employees. I'm happy to help you construct the employment contract with the potential adviser. Good luck p.s.: let me know how things turned out. I'm curious :-)

You already said it: "He isn't interested in salary as much as equity." If this developer is any bit worth his salt, he is worth the equity. A smaller piece of a bigger pie is far more valuable than a big piece of a small (or worthless) pie. Profit sharing is a red flag to me that just sounds "Cheap," unless you guys are making tons and tons of profit already. I don't know where you're based, but In Silicon Valley, a good developer can easily fetch $300-500k (base + bonus + yearly equity). UC Berkeley's average starting salary for NCGs majoring in EECS or Computer Science is $108k. Salary is something a good developer can easily get; why your startup (possibly unstable) rather than another more established company? If as the other person said, he walks and you're company is crippled, give him equity. Happy to chat more.