In recent years, stakeholders, regulators, and advisory groups have
continued to advocate for more transparency and change with respect
to executive compensation. One area of executive compensation that
is often embattled with criticism is change in control provisions.
DOWNLOAD REPORT Alvarez & Marsal’s Compensation and Benefits Practice has again partnered with Equilar and is pleased to provide this latest edition of our study on change in control arrangements among the top 200 publicly traded companies in the United States.
Alvarez & Marsal’s Compensation and Benefits Practice has again partnered with Equilar and is pleased to provide this latest edition of our study on change in control arrangements among the top 200 publicly traded companies in the United States.
The purpose of Change In Control (CIC) arrangements is to ensure that executives evaluate every opportunity, including an acquisition, with an eye toward maximizing shareholder value without considering how such an event will affect their personal circumstances. By addressing CIC provisions in executive compensation packages, Boards can be assured that executives will be more likely to approach the intricacies of negotiation without the distraction of personal considerations. Explore common CIC benefits below:
Accelerated vesting of long-term incentives is a common CIC benefit but is most often provided only when the executive is terminated in connection with the CIC (“double-trigger vesting”), as opposed to being provided upon a CIC alone (“single-trigger vesting”).
Companies routinely provide additional CIC benefits to executives.
CIC benefits that are deemed excessive under the Golden-Parachute rules can result in a 20% excise tax on certain payments. Companies choose to address potential excise tax in a variety of ways.
The purpose of Change In Control (CIC) arrangements is to ensure that executives evaluate every opportunity, including an acquisition, with an eye toward maximizing shareholder value without considering how such an event will affect their personal circumstances. By addressing CIC provisions in executive compensation packages, Boards can be assured that executives will be more likely to approach the intricacies of negotiation without the distraction of personal considerations. Explore common CIC benefits below:
While change in control (CIC) arrangements face increased scrutiny from regulators, shareholder activists, and others, additional strategic reasons exist for management and compensation committees to provide and benchmark executive CIC benefits.
Change-in-Control benefits can vary widely by industry. A&M’s 2021/2022 CIC Survey includes data from the top 20 companies in the following industries:
Change-in-Control benefits can vary widely by industry. A&M’s 2021/2022 CIC Survey includes data from the top 20 companies in the following industries:
The Compensation and Benefits Practice of Alvarez & Marsal assists companies in designing compensation and benefits plans, evaluating and enhancing existing plans, benchmarking compensation and reviewing programs for compliance with changing laws and regulations. We do so in a manner that manages risks associated with tax, financial and regulatory burdens related to such plans. Through our services, we help companies lower costs, improve performance, boost the bottom line and attract and retain key performers.
