It’s been years since I’ve had to ask for a substantial raise. The last time I did, it resulted in a $60,000 increase. Since then, I was either compensated fairly or, as an entrepreneur, benefited from growing profit distributions. But that dynamic changed when I sold my company—first a 60% stake, then the remaining 40% eighteen months later. Although I still hold equity, it’s no longer tied to the sizable distributions I once received.
By selling, I knowingly entered a different compensation model: a guaranteed draw (salary), a bonus component, and the potential for additional incentive-based compensation (stock and options). I remained patient, understanding that transitions take time – but that patience has run out.
As you’ll read in the email I sent to my boss (the third person I’ve reported to since joining the firm), I’ve repeatedly tried to have conversations about my compensation. When I sold, I made it clear that I expected to work my way back to a seven-figure income. The firm’s leadership presented a compelling vision of how my practice would grow within a larger ecosystem. But reality hasn’t matched the pitch.
I sold to a strategic buyer for two primary reasons: access to a large warm market and increased resources in marketing and sales to accelerate growth. In fairness and full transparency, I also wanted to de-risk by taking some chips off the table. However, the promised infrastructure didn’t exist, and while the firm is now investing in these areas, progress has been slow. It took three years before I could even sell to existing clients in the firm – despite being told during deal discussions that I should expect 50+ net new logos annually as a baseline. I mentally discounted that to 25, but the reality has been closer to 3-5 per year, due to internal roadblocks I won’t detail here.
You might be wondering why I’m pushing for a raise now, given that I’ve already shared my two-year notice of resignation. Simply put: two years is a long time. I want to be compensated fairly for the value I continue to bring. After initial growing pains and a period of slowed momentum, we’ve finally regained traction. The firm’s under-delivery doesn’t change the fact that I’ve been driving real results.
For the past three and a half years, I’ve prioritized taking care of my team. Now, it’s time to take care of myself.
They promised growth and resources, and now I’m demanding my fair share:
[Boss],I had planned to bring this up when we met [in person], but as you know, we didn’t get through all the agenda items.I’ve now been with the firm for 40 months, and in that time, I have not had a single discussion about my compensation. Despite numerous challenges – many outside my control – I’ve worked relentlessly to grow and strengthen the practice through resourcefulness, creativity, and persistence.When I joined, my salary was set at $402,000, grossed up for taxes & benefits from $360,000 due to the W-2 to K-1 transition and the fact that [My Company] covered 100% of benefits for our team and their families prior to being acquired. Over the last four years, inflation has eroded my purchasing power by 21.2%, yet my compensation has remained flat.Key Contributions & Business Impact
- Revenue Diversification & Growth: Reduced our dependency on [Client X] from 40% of revenue in 2021 ($1.1M) to just 10% in 2024 ($440K), while growing total revenue from $3.3M to $4.2M (8.4% CAGR).
- Commission Revenue: Increased from $276K in 2021 to $843K in 2024 (45% CAGR).
- Margin Expansion: Improved gross margins from 61.9% in 2022 to 69.4% in 2024, with a budgeted 75.9% in 2025.
- Business Development Challenges: Despite the firm being significantly under-resourced in marketing and demand generation, I’ve proactively driven growth through direct outreach, partnerships, and strategic initiatives.
- Internal Referrals: While initially promised at least 50 closed internal referrals per year, reality has been much slower (first deal took 300 days). Nonetheless, I’ve built strong internal relationships that have now resulted in 15 closed referrals (although volume is low, the close rate is high).
- Product Innovation: Developed and launched a new offering generating $1M in services and $3M in ARR from 33 net new logos in its first six months.
- Partnership Development: Rebuilt and Relaunched a secondary offering to go multi-vendor, leading to five deals worth $202K in services and $600K in ARR.
- Unfulfilled Promises: I was verbally promised a $35K bonus adjustment for additional work but was later told it was forgotten. Although small it bothered me out of principle. I let it go.
- Lost Business Due to Firm’s Processes: A $1.25M/year deal with [our Software Partner] was lost after legal took eight weeks to review a contract, despite my repeated follow-ups. Time kills deals!
My RequestGiven my contributions and the erosion of real compensation due to inflation and my key contributions, I am requesting an increase in my base compensation to at least $500,000 (+$98K). I would welcome additional compensation adjustments, as I joined with the expectation of significantly higher earnings through salary and bonus. I would also like clarity on bonus potential, its levers, and other incentive compensation (like stock & options).I’m committed to growing this practice and maximizing our success, but I need to be compensated fairly for the value I’m creating. Let’s plan to discuss this during our next 1:1.Cheers,Dom
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You typically have to choose your terms and their price or your price and their terms.
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You should extract your value, but be careful not to extract all the value – always leave money on the table so the other side feels like they got a good deal.
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Perception trumps reality, but when perception is reality, you hold the trump card – it’s the rare case when you can have both your price and your terms.
3 Responses
It’s a tough spot to be in and must have been really frustrating since you had total control till you had ownership.
I’m thinking this behaviour could be related to the fact that your practice represents a smaller part of the company revenue/profit or it was strategically not that important during the last years?
It’s a number of reasons:
1. We are small as a % of Revenue but the acquisition was strategic as we were the first acquisition to start a digital services business.
2. There is a lot of regulation that the firm has to navigate that makes it difficult to do business in general.
3. The focus has been heavily growth through acquisition and the financial arbitrage that comes with it. There has been very little focus on Organic growth after acquisition.
4. The marketing and sales functions are very immature for a ~$1B company.
5. Risk and legal drive a very conservative business.
They are slowly coming around and there is new discussions to focus on organic growth and level up on the sales and marketing functions but I suspect they will still take a back seat in favor of inorganic growth with a new PE sponsor. It’s a faster and more sure path to create value on the timeline that PE has.
Frustrating, yes!
You know, it’s probably good that you didn’t get a chance to talk this through in person. Even if you were prepped to rattle all of this off, it wouldn’t have been retained. There’s also basically no chance that you would have gotten an answer in the spot anyway – this gives them an opportunity to go talk behind the scenes and be thoughtful in their response.
Even more so if this was your first time meeting in person (a bit unclear). Would be a challenging first impression.
Either way, I think you did the right thing and wrote a very strong email, supported by results, with a clear ask AND a number of things in that ask that they could address with some flexibility. Well played