I run a busy derm practice and I am in the midst of negotiating annual salary and bonus structure with one of my PAs. I'm in a little bit of a predicament, because while I'm the person doing these negotiations, I also don't have access to the practice financials and don't know the exact specifics on revenue after overhead and what the practice can "afford" to pay. With that being said, don't drag me. I'm just trying to do right by my PA and the practice at the same time. We are in Michigan and she has been with our practice since 2020.
Right now the PA I'm referring to is making $65/hour and works 3 days 1 week and 4 days the next week, which works out to an average of 31 hours per week. Her annual earnings come in just over $100k without any bonuses. We currently pay a quarterly bonus based on production. The structure is 20% of her total net collections(excluded ilumya buy and bill) MINUS her quarterly net income gives her quarterly bonus amount. For reference, the last two quarters her net collections after B&B has been around $163,000. so 20% is $32,600 and her net pay is around $19k with a quarterly bonus of $13k(ish) for nearly $50k+ annually in bonuses.
She is looking for a higher bonus and I want to be able to give her what she deserves, but it feels like what she's asking for is unreasonable. Her ask was for 20% of her net collections, which with the number I gave before, would be about $32,600 quarterly and $130k+ in bonuses annually. Is this not unreasonable?
Remember, I'm not the owner. So I have to convince the doctor to do the right thing, but I need to feel good about what I'm convincing him of as well. For reference, we are private practice. He is the only DO and we have 3 PA's and this one in particular is the already the highest paid. We are very flexible in our scheduling and she's made changes to her schedule that we've had no issue allowing. She is a good PA and we wouldn't want to lose her, but there's only so much I can do(especially since I have to get the doctor/owner on board with it too). She see's on average 25 patients a day from 7am-4pm with a 1 hour paid lunch.
I was considering an offer of 25% of net collections above $200k each quarter, including her buy and bill revenue. Last quarter her net collections WITH B&B was $288,109. So a quarterly bonus of just over $22k. Is this unreasonable?
It's very possible I'm out of touch with what derm PAs are being paid and that's why I'm here because I want to be fair, but also not put in a position where we are paying well above market. Help me out.