General Manager Pay

I am looking to begin removeing myself from the day to day operations of my million plus dollar a year store. I have quite a bit of faith in my #1 shift manager and he has expressed interest in taking a true GM role at the business. My questions are what’s a reasonable salary and bonus pay, and how should I qualify the bonus. Obviously, food and labor% need to be considered as well as sales growth and cleanliness/store appearance.

A little background: Store is open 11AM to 4AM 7 days, 85% delivery, 15% carryout. 30-35 employees on the schedule at a given time, about 95 total employees throughout last year. Annual sales growth have been from 8%-20% since 2002 and YTD up 18%. Food and paper cost 30%, labor cost 36% including payroll taxes and wifes 50K salary. This manager earned 36K last year at hourly rate. I would continue to do the marketing and accounting.

I do not want to base bonus as a % of profit, as I do not feel comfortable sharing my P&L with my employees.

My first thoughts are to pay salary simmilar to last years wages, while requiring less hours worked in order to compensate for him being on call 24/7. I was considering bonus at 2% of sales, with some being paid on fairly easy to reach goals, and some being paid only for fantastic results. I haven’t come up with a good formula, and would appreciate any advice from those who own their stores in an absentee role(DFW and any others).
Thanks in advance.

If you shift manager does not already have health ins and a benefit package consider this for a trial year.

Co Paid Health Ins
Two Week Paid vacation
Liberal Overtime (at time and a half)
Sick Pay Days (7 per year)
Montlhy bonus of ??$$ for meeting realistic predetermined budgeted levels for income and expenses.

What you get is an employee who values his job and (deductable) benefits
and a trial period to see how he does without your day to day supervision.

I am in exactly the same position as you with a slightly larger store. I have selected this strategy for two key employees who will become Asst GM’s. If one fails, I’ll still have the other (plus me in the wings). I hate having all my eggs in one basket.

If I offer co paid health insurance to one, don’t I have to offer it to all full time employees?

NO… you let him/her buy it individually and you reimburse him as a perk

We do things a little different, not saying we are right we just do them different.

Our GM is salaried. One of the benefits of being salary is he is guaranteed a specific paycheck. When you break it down hourly he originally made less than he did hourly with overtime but his benefit is it is predictable.

We don’t have ANY sick days it is not an option for him. We offer him health insurance and he pays for it, it was figured into his salary. The great thing about making sure they have insurance is if they are sick for 20 bucks he can go to urgicare and get meds quick. Or 10 bucks at the doctor.

After one year 1 week vacation. After 3 years 2 weeks.

He has to work 6 days a week with a minimum of 48 hours.

As for his bonus. Any six week period he runs 20% labor, maintains 32% food cost and a sales increase of 10% over last year he is given a 5% salary increase. After a year went to 10%.

If he wants an annual raise or any kind of raise he is referred to the above scenario.

Hard to do, but possible. He is rewarded for his behavior by making him accountable. Just like me, if my costs aren’t in line I don’t get a raise and either does he.

I’m opening 2nd place in early fall. In similar situation. My main guy gets full health, 5-6K IRA contribution at end of year and 45K or so in hourly pay. When new place starts he’ll do all hiring/firing/ordering etc.etc. and get a 1% of gross paid monthly. This isn’t set in stone, and I know I should tie bonuses to food cost and labor or sales goals, but initially I’m not. Monthly bonus will be a nice chunk of change for the added aggravation.Hope that helps…good luck