Special Episode: How to Hire a CEO to Run Your Company | Andrew Wilkinson on My First Million

Check out My First Million Podcast Episode Page & Show Notes.

Key Takeaways

  •  Why does Sam and Andrew not want to be CEOs of a company?
    • Being a CEO is incredibly stressful and time consuming. There are tons of stories about CEOs being bad fathers because they spend all their time at work. Neither Sam or Andrew want that life.
      • Instead, it’s better to be the owner and simply hire a CEO to run the day-to-day operations
  •  When thinking about a compnenstation strategy for a CEO, you need to consider what goals you want them to hit and whether or not you want to give them equity
    • The less proven and experienced the CEO, the lower compensation Andrew tends to pay them
  • Since the role of CEO is incredibly important, you want to have a diligent hiring process
    • Andrew tends to source CEO candidates both in his internal circle and hires a recruiting company to find candidates as well
      • Then he’ll go through a thorough interview process and do a deep back groun check before considering signing someone
        • This involves hiring a firm and paying them $15,000 to call up candidates, walk them through their resume, and then calls up their references and former colleagues to verify their background 

Intro

Why You May Want To Hire A CEO For Your Company

  • Although Sam loves his business, he doesn’t want to be involved in all of the day-to-day operations
    • Instead, Sam’s hiring a CEO to run the company so he could focus on the creative side 
      • This is exactly what Andrew does. He finds buys companies and finds great CEOs to run them for him. He had hired about 15-20 CEOs.
  • Why does Sam and Andrew not want to be CEOs of a company?
    • Being a CEO is incredibly stressful and time consuming. There are tons of stories about CEOs being bad fathers because they spend all their time at work. Neither Sam or Andrew want that life.
      • Instead, it’s better to be the owner and simply hire a CEO to run the day-to-day operations

Compensation Strategy For A CEO

  • Andrew paid the CEO of MetaLabs a base of $250,000 plus bonuses
  • When thinking about a compensation strategy for a CEO, you need to consider what goals you want them to hit and whether or not you want to give them equity
    • The less proven and experienced the CEO, the lower compensation Andrew tends to pay them
  • If the company is already doing tens of millions in revenue a year, it doesn’t make much sense to offer equity unless you believe you’ll sell the company in the future
  • You can also offer phantom equity: a percentage of proceeds or dividends if the company gets sold
    • It’s similar to a royalty: You don’t actually own the business but you do get many of the perks that come with equity.

Hiring A CEO

  • It’s hard to delegate a hard task like hiring a CEO, but if you can find someone you trust and is great at what they do, it will pay off
  • Since the role of a CEO is incredibly important, you want to have a diligent hiring process
    • Andrew tends to source CEO candidates both in his internal circle and hires a recruiting company to find candidates as well
      • Then he’ll go through a thorough interview process and do a deep background check before considering signing someone
        • This involves hiring a firm and paying them $15,000 to call up candidates, walk them through their resume, and then calls up their references and former colleagues to verify their background 

My First Million : , , , ,
Notes By Alex Wiec

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