The venture capital firm is looking to finalize the compensation for the CEO. What factors should they consider in determining the CEO’s compensation CASE:HealthyWe Ltd.HealthyWe Ltd. is a brand-new firm that will open its doors exactly three months from today. Its business objective is to providehealth and wellness advice and services to the general public. HealthyWe Ltd. plans to provide customers with personalized advicegeared to a customer's specific physical, mental and emotion needs so that they can be a healthier and happier version of themselves.Services involve specialized full body evaluation services that include evaluations of and/or plans for nutrition, physical fitness andtraining and emotional well being. Each of these service offerings involving evaluations/plans can be purchased separately as well. Inaddition, HealthyWe Ltd. will also offer physical training equipment for sale at each of their locations. Their service/equipmentofferings would be available for any customer from the ages of 10 to 70.In order to provide high-quality advice, each location will employ a physiotherapist (to provide advice on problems such as injuries orchronic back pain), a nutritionist (to provide advice on healthy eating habits and specifically focused eating plans that are best suitedfor personal wellness goals), a person with a bachelor's degree in kinesiology (to provide advice on training for various sports or otherphysical activities) and a massage therapist/yoga instructor (to provide advice on reducing issues like heightened anxiety and stressthrough movement and breathing work) . In the initial appointment, a staff member will sit down with customers and develop apersonalized program with various specialist offerings that meets their own specific objectives and needs.The remainder of the staff in the location will consist of a manager, with a Bachelor of Commerce degree, and sales staff, who willhave at least high school diplomas. Locations will open in select shopping malls/strip plazas and will have long opening hours. It is expected that between 8 and 12 salespeople will be needed for each store. Because the stores are located in shopping malls, they willoperate on a seven-day-a-week basis, open 9:00-9:00 weekdays, 9:00-6:00 Saturdays, and noon to 6:00 on Sundays.Aside from personally helping customers with their plans and evaluations, the roles of the physiotherapist, nutritionist, massagetherapist/yoga instructor and kinesiologist will be to train other employees in understanding the service offerings and trainingequipment that can be used for various conditioning and rehabilitation purposes. Initially, sales staff will be given general training, butas time goes by, each salesperson will be expected to learn in depth about all the different services and pieces of equipment, to helpcustomers diagnose their needs accurately, and to be able to explain intent of the service offering and/or the proper use of theequipment. Because of the high level of training required, all employees will be full-time.The owner of the business and CEO has found through personal experience that she has been unable to find a one stop health andwellness offering that can help people improve their well being both from the inside and the outside. In her previous experiences shehas also found that the people selling training equipment had very limited knowledge and often gave poor advice on what to buy,how to use it or even what benefits the equipment can provide the user.The owner of the business and CEO has secured funding from private investors and from a large Canadian venture capital fund. Inorder to get volume discounts on the equipment she will be purchasing and to beat competitors into the market, she wants to startoff quite large, with stores in major cities in Ontario and the four western provinces, before expanding to Quebec and the Atlanticprovinces. She knows that this is a risky strategy, and that cost control will be essential to keep the business going long enough tobecome well known and develop a stable clientele. She does not expect the business to make a profit for at least one year, or maybeeven two. Her investors are in full support of this strategy.Main competitors to HealthyWe Ltd. will be individual health care service offerings, sporting goods megastores, bulk warehouseretailers and department and discount stores, each of which sells some of the same equipment. Some of these outlets will be able toprice their equipment lower than Healthywe Ltd. will be able to, but none have the range of equipment that HealthyWe Ltd. willhave, and none will provide the personalized and complementary wellness services that HealthyWe Ltd will.The owner believes that the key to her business success will be highly motivated and knowledgeable employees who have a strongconcern for their customers and who are able to work as a team with the other employees to provide the best possible customerservice. Since no two customers are exactly alike, employees will have to be innovative in developing solutions that fit their needs. Itwill also be crucial to keep up with the latest health, fitness and training trends, as knowledge about health and fitness is continuallyincreasing, along with new and different types of specialized services and equipment. A key aspect of company strategy is to be themost up-to-date and advanced supplier of new services, products and techniques.Although the owner has given a lot of thought to her business, one thing she hasn't really given much thought to is how tocompensate her employees. Since she doesn't really know much about compensation, she tends to feel that the safest thing would beto just do what her competitors are doing.

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Venture capital is a form of private equity and a type of financing that investors provide to…