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Executive and Equity-based Compensation

Having the right executive and equity-based compensation plan in place is one of the key aspects of attracting and retaining skilled employees. There are many different plans that a company may have, but some of the most effective combine salary with other benefits, such as profit-sharing, deferred compensation, a 401(k) retirement plan, health insurance, and transportation-related perks.

Using equity as a means of rewarding executive performance is a common practice. Some of the common form this may take include:

  • Granting stock options or restricted stock upon the completion of designated milestones; or
  • Providing an executive with synthetic equity, specifically Stock Appreciation Rights (SARs).

In addition to preparing and following an executive and equity-based compensation plan, it is important to stay current with changes in the rules and regulations that impact these plans.  Recent changes to healthcare law have had significant impacts on many businesses in California.

A business entity also must be cognizant of the various executive compensations rules that may be applicable, as well as the disclosure requirements.  It is imperative to structure the equity plans as part of a total employment package, which also may include severance considerations, non-competition contracts, and change of control agreements.

When considering other business transactions, such as a merger or acquisition, public securities offering, or employee terminations, it is imperative to analyze the compensation plans in place in the involved entities in order to determine how these matters will be managed moving forward. A failure to do this may lead to an improper deal structure and serious employment liability problems after the closing of the transaction.

At Brunoro Law, the firm takes a big picture approach to creating plans that work within the overall framework of clients’ goals and needs.  The retention of skilled executives and other employees is crucial to the successful operation of the business and that always is at the forefront of the analysis. Brunoro Law offers a free one-hour consultation so that potential clients may learn about how the firm can help them with their corporate and employment needs.