SESSION TWO WORKBOOK JB&J Decisions and Notes for Modules 1 – 5 BSMARTer Business Simulation Management and Relationship Training

Organizational Structure and Compensation MODULE 1

Service Team Structure 1 Example diagram of service team structure. Beth Springsteen CEO/COO John Jacob Partner / Lead Advisor Alice Cooper Partner / Associate Advisor Rachel Bonow Partner / Lead Advisor CIO Kelly Zorn Associate Advisor Tico Jordan Partner / Lead Advisor Estates Lillia Pennington Associate Advisor David Torres Partner / Lead Advisor Tax & Accounting TBH Associate Advisor Joan Teal IT Manager Larry Ross Office Manager Arnie Rockwell CSA Eddie Raye CSA Gabby Crocket CSA TBH Analyst Sal Jones Admin Asst

Service Team Structure 1 Example diagram of service team structure. Beth Springsteen CEO/COO John Jacob Partner / Lead Advisor Alice Cooper Partner / Associate Advisor Rachel Bonow Partner / Lead Advisor CIO Kelly Zorn Associate Advisor Tico Jordan Partner / Lead Advisor Estates Lillia Pennington Associate Advisor David Torres Partner / Lead Advisor Tax & Accounting TBH Associate Advisor Joan Teal IT Manager Larry Ross Office Manager Arnie Rockwell CSA Eddie Raye CSA Gabby Crocket CSA TBH Analyst Sal Jones Admin Asst

Service Team Structure 2 Draw a picture of your service team structure. Internal support to the Partner and Associate Advisor Team in all operational matters Supports your Partner, Associate Advisor and you Works directly with your Partner and you to execute on your specific needs Your Lead Advisor is your primary contact for all matters related to your wealth PARTNER ASSOCIATE ADVISOR ANALYST * (To Be Hired) CLIENT SERVICE ASSOCIATE YOU * The JB&J Briefing Book suggests the creation of the Analyst role, listed above

Service Team Structure 3 We believe that in order for the firm to be cohesive and create enterprise value, that the partners must allow Beth to truly become the CEO and COO. This will not be easy but is critical to the success of the firm and its long term viability. Each of the partners will report to the CEO/COO. The Associate Advisors, Kelly and Lillia will report to the CEO, COO and support all of the Partners. What that means is that each end client will have their stable team of Partner and Associate Advisor but there will not be a situation where a partner only works with one specific Associate Advisor. This structure will help in breaking down the silos and moving the firm from what is really a fragmented business to more of a practice. It will also enable the Partner to determine the best fit in terms of coverage of Associate Advisor for a particular end client. It will encourage team work and collaboration of all members of the team and will expose next generation partners to different styles and training. The Associate Advisors are to be brought into client meetings to encourage relationship building and demonstrate to the end client that the firm is more than one individual and the team based approach. Associate Advisors need exposure to on the job experiences and training and these meetings will be instrumental in their development. The Associate Advisors increasing involvement in the relationship will hopefully enable a smoother succession when needed. In client meetings, the Associate Advisors will assist the Partners in running the meeting. They will take notes on the meetings, and play a key role in keeping track of the follow-up items and resolution. They will be engaged in coming up with solutions to client issues and will communicate with end clients with the support of the partner as appropriate (depending on complexity and nature of issue). Provide an explanation of your service team structure.

Compensation Benchmarking 4 Determine base compensation for three employees in your briefing book. Complete the task using the next two pages. PositionSalaryBonusTotal SAL JONES Your Lowest-Paid Employee $39,450$3,550$43,000 ALICE COOPER Your Highest-Paid Employee Mid-range Benchmark Median Benchmark Third Quartile See Appendix A for position compensation information Source: 2013 InvestmentNews/Moss Adams Comp Study

Compensation Benchmarking 5 What changes, if any, will you make to compensation? Alice Cooper received 5% after EBOC and the other 4 Partners split the difference. John Jacob should have received 20% (not 25%) of the remaining profit. We are paying Kelly for a role that she does not own. Create profit sharing as a way to incentivize and flatten out the salaries. Take your super stars and create an incentive program in cases of outperformance. We are a top firm and should pay in the top quartile for all associates. Schedule a call with Wendy Benedict and possibly get the support of Waldemar. Remember the “Fairness Principle” says Phillip. Phillip said that reducing compensation for one associates has never worked out. He said it is the best way to have someone get mad and eventually leave the firm.

Staff Selection and Performance Management MODULE 2

Performance Evaluation 7 Design a performance evaluation form. Follow the worksheet. (20 minutes) Job FactorExplanation 1.Prosductivilty 2. Service 3. Other employees 4. Number of clients services 5. AUM 6. Client satisfaction Describe how the forum will be used. ** Schedule a call with Lisa to discuss these two topics. ** Qualitative: Knowledge, Culture, Team Work, Feedback from Clients (surveys) & Partners, Quantitative: Accuracy (NIGOs), Tasks Completed, Response Time, Notes

The Culture of Your Firm MODULE 3

Organizational Culture 8 What We Do Now: -Client service -Individualistic (silos) -Ownership driven -Top heavy -Not sure how much the goals are shared -Not unified culture as we are individual firms without commonality -No clear vision -No clear leader What We Need to Do: -Separate ownership from management -Create a CEO and manager of the firm -Deliver exceptional client service -Idea and best practice sharing -Kochis 4 Points: client service, intellectual honesty, leadership, open to unconventional wisdom -Become a “Talent Magnet” and the employer of choice for people -Growth and Accountability -Collaboration and Teamwork; Team-based approach * Resources: Kogen, Kohl, Cheatsheet, Collected Compensation Profiles, Building an Effective Plan Guide Be yourself, be heard Describe the culture of your firm. What changes would you make? How?

Incentive Compensation MODULE 4

Incentive Compensation 9 Design Advisor Bonus Plan

Partner Compensation MODULE 5

Partner Compensation 10 -Consider making Beth Springsteen buy ownership so that she is personally invested in the firm -Determine who your partners are -What should their base compensation be? -This amount does not include dividends Set the base compensation for your partners.

Partner Incentive Compensation 11 Don’t design this before partner base compensation Do we really need a bonus plan? Create, discuss and define incentive compensation for partners.

Other Initiatives 12 Describe any other initiatives you will undertake as a firm. These may be outside of the scope of compensation and people but may be important parts of your case. Notes InitiativeExplanation