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Alexander Muse Says, on 5-3-2008 at 16:46:01     

With turnover in the IT space so high, it is hard for me to consider releasing our financials to employees. I assume your company is as closely held as ours and as a result the income numbers are easily associated with individuals. How do you deal with the realization that your income becomes a fairly public number (both to your clients and employees)?

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Mike Says, on 5-4-2008 at 20:24:23     

That’s a good question and a legitimate concern. I can think of two ways that people are handling this:

1. They are only posting financials to the gross margin level and doing bonuses based on that number. If your company is small enough that you handle everything in terms of expenses, this could work.

2. They are posting “modified” financial statements instead of standard P&L’s. What I mean is that you could take multiple buckets of expenses and lumping them into one larger expense category so that the details aren’t as obvious.

Either way, I think you can accomplish a great deal of what you are looking for.

MRC

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