The Owner Pay Stack

For years, my income rose and fell with the business.

Good month? I’d splurge.
Bad month? I’d stop paying myself altogether.

I was treating pay like a feeling, not a system, and my business rose and fell based on my mood. (Not good.)

Then one of my mentors said something that flipped the switch:

That line changed everything.

When I started paying myself predictably and systematically, the business stabilized. My decision-making improved, my team got calmer, and the company finally started scaling on purpose…not panic.

Now I want to show you what my mentor showed me: how to build an Owner Pay Stack so you can pay yourself like a real CEO…without starving your company in the process.

Here’s the playbook:

You should be paying yourself what you’d pay a competent outsider to do your actual job today. Said another way, if you had to replace yourself tomorrow, what would it cost? That’s your starting point.

Here are some benchmarks:

Once you’ve set your base, add 15% on top for personal savings and investing (that’s when most founders finally exhale) and review quarterly.

Remember: Salary should be the last thing cut. If cuts are required, start with projects and nice-to-haves, not the owner’s oxygen.

The government is the only vendor with missiles…so pay them first.

This one habit turns “surprise tax bills” into routine line items, and the peace of mind it buys you is worth far more than the interest you’d earn elsewhere.

3 - 6 of operating expenses should live in a boring money-market account. Not Bitcoin. Not index funds. Cash.

When downturns hit, you won’t have to choose between payroll and paying yourself. You’ll already be covered.

Distributions should be POLICY…not emotional.

From there, pay yourself (and other owners) at least quarterly. We distribute 80% and hold back the remaining 20% for year-end.

Bonus alignment tip: Tie team bonuses to Distributable Cash, not top-line. Healthy businesses throw off cash…not just revenue.

For the full system showing how these accounts interact, check out this issue I wrote on The 5-Account Cash Flow Waterfall System.

When to pause distributions or give yourself and your exec team a raise shouldn’t depend on how you feel. It should follow rules. Here’s how we do it:

Pause Distributions if:

Greenlight Executive Team Raises/Bonuses if:

Tripwires keep fear from driving your pay decisions. Greenlights reward actual performance, not good vibes.

Most founders believe paying themselves well is selfish.

It’s not….it’s stewardship.

When you’re personally stable, your company can finally breathe. When you’re scared, you make short-term decisions that cost long-term growth.

Paying yourself well doesn’t drain the business…it disciplines it. Your salary is proof of a healthy company, not a threat to it.

⚡️ Action Step: Check Salary.com and ChatGPT and decide what your CEO salary should actually be. Then, open your banking app and create two new accounts named “Tax Vault” and “Distributions,” and set a calendar reminder to make the necessary transfers and start building that Distribution Account.

P.S. I’m looking for 5 business owners who want to work 1-on-1 with my team and me to install a custom “operating system” so your business can scale and so you can exit the day-to-day. Click here to get the details.

Here’s some other content from the Scalable network, plus some other cool stuff I liked and thought you might like, too: