[jmcminis]

Be direct, honest, and compassionate. They are good at something, but not the thing you need most now. Explain that to them, let them go, look for someone else.

Don’t forget that this person is a part of your network and always will be. They might be a good fit later. Someone they know might be a good fit.

[troydavis]

Good advice. Also, if OP’s statement “my gut tells me she can't really execute and can only delegate” is accurate, it’s not about compensation. Given that, don’t bring up compensation at all.

[fxfan]

How does op save face now that he has made it about compensation?