I am a young entrepreneur. I started an online business about five years ago, and it has steadily grown. It has come to the point where I need help to take it to the next level.

My brother has agreed to help the business in exchange for equity. We have had many conversations about how to devise a fair equity/compensation plan, but to no avail. I've realized neither of us have any experience in this

Here is what we've theorized of doing, in principle:

He agrees to commit X hours a month to the business. He is initially compensated a percentage of all revenue.

We will create a tier system specifying different levels of monthly sales (which are above the current level of sales). Once monthly sales reach the next level up, he receives a certain percentage of equity, and the percent of revenue he is receiving decreases.

In this way, I am only giving equity in exchange for contributions that assist in the long term growth of the business. He is also protected, because if he works for several months and there is no growth, he is still compensated for his time, via a percentage of the revenue.

Do you think this is a good scheme? If so, how should we go about determining the raw numbers? I am also open to hearing other potential compensation plans involving equity? The main thing we both insist on is that any agreement be fair to the both of us...we are brothers after all

Any advice is greatly appreciated.