There are two real schools of thought on structuring a Head of Growth’s compensation, and they represent a fundamental tension every founder faces: paying for potential versus paying for proof.
Camp A: The Performance-First Model
This camp believes in making the variable, performance-based part of the compensation plan the main event. The base salary is just enough to be respectable, but the real money is made when the business grows. Brian Anderson made a strong case for this on an episode of Honest Ecommerce, explaining how smaller companies can land incredible talent by getting creative. He talked about structuring deals where his pay was tied to the company’s upside—he gets a piece of everything above the baseline he helped create.
This "eat what you kill" approach is incredibly appealing to founders, especially in businesses doing less than $10 million in revenue. It directly aligns the Head of Growth’s financial incentives with the founder’s. You aren’t just paying for someone to show up and manage campaigns; you are paying for tangible results like increased revenue or profit. It de-risks what is often a very expensive hire. This philosophy is all about finding a candidate with an entrepreneurial spirit who is willing to bet on themselves and the brand for a potentially massive reward.
Camp B: The Stability-First Model
This camp argues that if you want to attract a true, seasoned leader, you have to lead with a strong, competitive base salary. As Cary Sparrow explained in a deep dive into compensation strategies on Firing The Man, there is a "threshold level of compensation" required to get top talent in the door. He points out that for many earlier-stage companies, the outlook is simply too volatile to have a reliable incentive plan. A promise of future upside feels flimsy if a candidate is worried about paying their mortgage next month.
This perspective is reinforced by the realities of the hiring market. On Ecommerce Conversations, Zach Stuck shared a story of interviewing a Head of Growth candidate who asked for a $250,000 base salary plus upside, a figure his smaller holding company couldn’t possibly afford. While that number is high, it shows that experienced operators expect to be compensated for their expertise with a secure salary. The thinking here is that a high base attracts a different caliber of candidate: a proven professional who can bring stability, process, and predictable growth, rather than a hungry up-and-comer who might be more of a gamble.
Personally, I believe the right answer is a hybrid, but the "right" mix of base to variable pay depends entirely on your business’s maturity and the kind of person you need right now. These two camps don’t just offer different payment structures; they attract fundamentally different kinds of people. Camp A attracts the entrepreneurial risk-taker who wants to build something. Camp B attracts the seasoned operator who wants to scale something. The most important first step is deciding which of those archetypes your business needs to get to the next level.
If you’re a bootstrapped brand under $5 million, you’ll likely need to lean on the creative, performance-heavy model. Be transparent about the finances and sell the vision and the potential windfall. But if your business is more mature, profitable, and complex, trying to skimp on the base salary will likely screen out the experienced leaders you need. For you, the bonus structure is still critical for alignment, but it must be built on top of a foundation of a competitive base salary that respects the candidate’s experience and the market rate for their skills in hiring, incentivizing, and growing a team. A healthy company culture starts with fair and aligned incentives.