Hi everyone,

We have (5) "Teams" comprised of a Team Lead / Business Development Person and a support team for his/her business. We find it allows for much greater syngergy once we started growing beyond 15-20 people. We currently compensate each of the Team leads with a "Team Profit Sharing Bonus" where he/she earns a percentage of their team profit based on revenue - cost of goods sold - direct team expenses (payroll, travel, etc.). Overhead is a company expense not charged to the teams.

Currently we treat the bonuses paid out on this plan on a cash basis as in we take the expense and put it against the team when it is paid. One of the team leads asked if this is double dipping as he said shouldnt the bonuses not count against the team reducing our profit. My gut reaction was that is incorrect as in a profit sharing plan we have to cover all of the expenses, even his bonuses....

But I wanted to see if anyone had any other thoughts? should we exclude those bonuses from costs against the team or charge the team for them?