I would appreciate some input on pay plan options for a GM position for two small franchise stores.

Service absorption is mid to high 90%, sales volume is 70/mth avg. combined. A relocation is required.

Thanks for sharing! 

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The pay plan I like for this exact situation is the 10&10

$10,000 base and 10% of dealer net profit.  Demo for Gm and spouse. 

There are so many variables, but this is a good plan that dosen't have buy-in or extras. 

Is the position for a real GM or just a GSM in disguise? Will this person have total daily control and interface with the vendors and factory while having all other managers reporting to him or her? Will they have responsibility for preparation of the statement and can they interpret and manage by the numbers? If yes than a base plus a percentage of the net is appropriate.

If on the other hand they are to be just a glorified sales manager with no authority or responsibility over the various departments and no interface with the vendors and factory they should be paid appropriately. If the dealer principal is usually present and the GM is just a desk man who closes late most nights with no strategic, marketing, or overall P&L responsibility than the use of the title just predisposes you to overpay them.

For a real GM I would stair step the base salary based on a rolling average of the profitability and pay eight to ten percent of the net based on certain variables. Two demos and a paid vacation based on reaching a reasonable objective along with paid medical should attract top level talent even to smaller stores.

If your store are way underperforming and it will be easy for a good GM to turn them around quickly keep that in mind when designing your pay plan. Good Luck…   






Thank you Mr.Creamer. Very good advise. I have been played for a "The Title" in the past.

Well said Dan and sound advice. The only thing I would ad is can the store afford the GM and proposed compensation plan?


Nice Advice!!! I had to learn the hard way!

Dan hit it on the head. If your new hire is a true GM and with 90% service absorption you should perhaps look for a GM with good retail skills. So often GM's are either great retail guys with minimum fixed skills or great fixed guys with minimum retail skills hard to find the perfect hire.

The interview will be the most critical phase of the hiring process,so structure it to give you some insight into his overall ability.Pay plans should be designed to concentrate his attention on the areas that need the most improvement and should be 1/2 base and 1/2 commission based on profitability with perhaps a CSI bonus/penalty as a kicker. DON"t pay more than the competition for your market area but allow some flexability for that perfect guy.

Benefits should also mirror the market. There is no need to develope a complicated pay plan.






Benifits should also mirror your market .



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