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Structuring Management Incentive Equity Arrangements in Private Equity Acquisitions

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Thursday, July 19, 2018

Recorded event now available

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This CLE course will analyze equity and other incentives for managers of a target company in private equity acquisitions. The panel will discuss various approaches to the types of equity or other incentives offered, vesting, treatment of incentives when managers leave the company, anti-dilution rights, and more.


A significant feature of private equity M&A transactions is ensuring retention of management in the target company and their delivery of the company’s business plan through appropriate incentives and alignment with the sponsor to share in the future growth of the company. The acquiring company often provides incentive equity arrangements at the time of the acquisition of, or investment in, the company.

Both M&A and management counsel must be able structure incentive plans that take various issues into account, including the type of equity (or other) compensation, vesting periods, treatment of managers who are not remaining, business tax consequences, and who will be entitled to incentives before and after closing.

Listen as our authoritative panel discusses how to structure plans that will result in retaining management personnel who will be incentivized to act in the best interests of the company during the acquisition process and after closing.



  1. Management incentive compensation plans in M&A: when appropriate, who should receive
  2. Types of equity and other compensation
    1. Rollover equity
    2. Incentive equity: non-qualified stock options, profits interests, leveraged common stock
    3. Cash bonuses and other alternatives
  3. Vesting: time, performance or a combination
  4. Tax considerations
  5. Anti-dilution rights: none, but rollover equity and vested incentive equity may have preemption rights for new issues of securities
  6. Transferability: treatment of incentive equity held by managers who leave
  7. Pooling—phantom shares


The panel will review these and other critical issues:

  • How should an acquiring sponsor determine who in a target company will be entitled to equity incentives and the amount of equity-based incentives offered?
  • What are the different types of equity compensation and what are the advantages of each?
  • When is time vs. performance an appropriate benchmark for vesting of incentives?
  • What are mechanisms that allow for the future issuance of securities while preserving the value of incentive shares?


Guadiana, James
James A. Guadiana


Mr. Guadiana focuses his practice on the tax aspects of domestic and international transactions and investments. He...  |  Read More

Wang, George
George H. Wang


Mr. Wang focuses his practice on mergers, acquisitions, joint ventures, investments and broad-scope business...  |  Read More

Panter, Benjamin
Benjamin D. Panter

McDonald Hopkins

Mr. Panter advises clients across a broad spectrum of industries on executive compensation and employment law issues...  |  Read More

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