I thought it might be helpful to layout a suggested agreement for treasure splitting. This is a pretty important topic to discuss because OSR¹ AD&D BTB² places a heavy emphasis on treasure acquisition. Treasure awarded according to the Dungeon Master's Guide is a significant source of experience points. On top of that, once treasure has been awarded by the Dungeon Master, it is in the Player's realm to divide the treasure as they see fit; including shares of treasure for Henchman. Without a sufficient treasure split, Henchman, who are already only receiving half-xp for Monster slaying, will quickly fall behind the leveling curve.
¹Old School RPG   ²By the Book

Magic items are of particular concern, due to the nature of how experience points are awarded for them. Magic items have two listed values: xp and gp. If a Player claims a magic item and keeps it, she is awarded the listed xp value along with the rest of her awarded xp. However, if the Player decides to sell the item, the sale price will be added to her as treasure collected. The difference between these two values can be significant. An example will demonstrate: a simple Sword +1 has a listed xp value of 400. This is intended to indicate the experience gained acquring the sword, as well as using it. As such, its value is in it's usage. On the other hand, the same Sword +1 has a listed sale value of 2,000 gp. If that sword is sold, and the treasure "collected"³, that will be worth 5x more experience points! Keep this math in mind when considering the division of items, especially magic items. Again, don't discount a Henchman's need for magic items; a lack of magic items can have a significant impact on their effectiveness in the party.
³I'll be posting more about xp later. In short, treasure earned is not necessarily treasure "collected" for the purposes of xp

Suggested Agreement

The simplest solutions are frequently the fairest and also the easiest to manage.

1. Equal shares (share and share alike!) are awarded based on the number of characters in the party.
   • Henchman count as ½ a character (eg. in the current party, 3 shares would be calulated, 1 for Maalcyor, 1 for Moonglum, and the 3rd being split evenly for Balin and Tadhm)
   • Other NPC hirelings, mercenaries, etc would have access to treasure-shares as was negotiated when they were hired.
   • Slain, or otherwise incapacitated, characters are eligible for shares in treasure gained up-to and including the encounter which incapacitated them.
2. Any items, magical or otherwise, will be distributed by consent of the party.
   • In the event that an agreement regarding the equitable split of items can't be reached (in my experience, this happens less frequently than you might think):
     1. All items (non-currency; ie. gems, magic items, art, captured slaves(!), furnishings, etc) will be grouped into a number of lots equaling the number of PCs (NPCs would be excluded).
     2. Lots should be as equal as possible, according to the listed gp value of the items.
     3. PCs then dice-off to determine order and, in that order, choose lots.
   • It is the responsibility of the individual PCs to distribute magic items to their Henchman as they see fit.

Once treasure is split, the new owners can do with their treasure as they like, including magic items. If a particular piece of gear, awarded to PC A, is desired by PC B, that PC can offer to purchase it, trade for it, borrow it, whatever. The new owner of the item can even sell it to a merchant out of spite in retribution for some previous slight; or toss it off a cliff, if she so desires! Once the division of treasure is complete, "all sales are final", as they say.

What do you guys think? I'd like to see an agreement formalized before we begin gaming. Keep in mind that there is nothing special about the agreement outlined above, it was simply my attempt to kick-start this process. Feel free to tell me you guys would rather have NO agreement heading into the adventure! As was stated at the beginning, division of treasure is completely in the realm of Player decision.