Pre-IPO Planning - Pearl Meyer & Partners
Pre-IPO Planning - Pearl Meyer & Partners
Pre-IPO Planning - Pearl Meyer & Partners
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<strong>Pre</strong>-<strong>IPO</strong> <strong>Planning</strong>: Compensation <strong>Planning</strong> for an Initial<br />
Public Offering<br />
Executive Compensation<br />
• Establish compensation strategy/objectives<br />
- Current time frame to <strong>IPO</strong><br />
- Post-<strong>IPO</strong><br />
• Develop Peer Group(s) to evaluate current pay practices against market<br />
- Industry competitors – review proxy filings for specific industry and<br />
revenue/market cap<br />
- Recent <strong>IPO</strong> companies – review S-1 filings of similar firms having<br />
an <strong>IPO</strong> within last two years<br />
• Assess executive compensation competitiveness<br />
- Base salary<br />
- Annual incentives<br />
- Equity participation and value<br />
- Potential benefits/perquisites<br />
• Assess equity compensation practices<br />
- Dilution<br />
- Plan types<br />
- Participation<br />
- Allocation<br />
• Develop short-term (annual) incentive plan<br />
- Objectives and measures<br />
- Eligibility and participation<br />
- Expected value<br />
- Timing<br />
©2009 <strong>Pearl</strong> <strong>Meyer</strong> & <strong>Partners</strong>, LLC
• Develop long-term/equity incentive plan<br />
- Authorize appropriate # of shares and desired plan types<br />
Incentive stock options/Non-qualified stock options<br />
Stock Appreciation Rights (SARs)<br />
Restricted stock or Restricted Stock Units (RSUs)<br />
Performance shares/units<br />
- Draft/review plan document drafting/review<br />
- Create detailed plan design<br />
• Equity allocation<br />
- Develop grant guidelines (eligibility, # of shares granted, frequency)<br />
- Determine <strong>IPO</strong> grants<br />
- Assess dilution levels<br />
- Determine pricing (avoid “cheap stock” issues)<br />
- Obtain underwriter input<br />
- Determine pre-<strong>IPO</strong> hiring/budget requirements<br />
- Develop post-<strong>IPO</strong> hiring and add-on guidelines<br />
• Review other benefits and perquisites<br />
- Competitiveness<br />
- Shareholder perspectives<br />
- Disclosure<br />
• Consider security arrangements<br />
- Severance<br />
- Employment agreements<br />
- Change-in-control (CIC) agreements<br />
• Assistance with S-1 filing<br />
- <strong>Pre</strong>paration of Compensation Discussion and Analysis (CD&A)<br />
©2009 <strong>Pearl</strong> <strong>Meyer</strong> & <strong>Partners</strong>, LLC
• Determine Board structure<br />
- Membership<br />
- Committees<br />
Board of Directors<br />
• Establish Compensation Committee<br />
- Members<br />
- Committee Charter<br />
- Committee Calendar<br />
- Relationship to Board<br />
• Assess compensation competitiveness; total remuneration:<br />
- Annual retainer<br />
- Board meeting fees<br />
- Committee compensation<br />
Chair retainer<br />
Meeting fees<br />
- Equity compensation<br />
- Deferral opportunities<br />
• Determine Director compensation<br />
- <strong>Pre</strong>-<strong>IPO</strong><br />
- Post-<strong>IPO</strong><br />
©2009 <strong>Pearl</strong> <strong>Meyer</strong> & <strong>Partners</strong>, LLC
NEW YORK<br />
570 Lexington Avenue<br />
New York, NY 10022<br />
(212) 644-2300<br />
newyork@pearlmeyer.com<br />
ATLANTA<br />
One Alliance Center<br />
3500 Lenox Road, Suite 1708<br />
Atlanta, GA 30326<br />
(770) 261-4080<br />
atlanta@pearlmeyer.com<br />
BOSTON<br />
132 Turnpike Road, Suite 300<br />
Southborough, MA 01772<br />
(508) 460-9600<br />
boston@pearlmeyer.com<br />
CHARLOTTE<br />
3326 Siskey Parkway, Suite 330<br />
Matthews, NC 28105<br />
(704) 844-6626<br />
charlotte@pearlmeyer.com<br />
CHICAGO<br />
123 N. Wacker Drive, Suite 1225<br />
Chicago, IL 60606<br />
(312) 242-3050<br />
chicago@pearlmeyer.com<br />
www.pearlmeyer.com<br />
HOUSTON<br />
Three Riverway, Suite 1575<br />
Houston, TX 77056<br />
(713) 568-2200<br />
houston@pearlmeyer.com<br />
LOS ANGELES<br />
550 S. Hope Street, Suite 1600<br />
Los Angeles, CA 90071<br />
(213) 438-6500<br />
losangeles@pearlmeyer.com<br />
SAN JOSE<br />
2880 Zanker Road, Suite 203<br />
San Jose, CA 95134<br />
(408) 954-7399<br />
sanjose@pearlmeyer.com<br />
©2009 <strong>Pearl</strong> <strong>Meyer</strong> & <strong>Partners</strong>, LLC
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