Nearing an exit to a private equity firm, my employer wants to change the language in my employment agreement from “phantom equity” (I have money that is due upon a company sale), to “transaction bonus”. What are the reasons you think?
Owner and CEO of a $100m Rev / $20m Group just exited to PE (LOI of $220m).
Group is made up of 3 different $30-40m Rev, each with own President (no CEO other than the CEO of the Group, who is retiring)
I imagine post-LOI the buyer will look to finalize new employment contracts with the 3 company presidents.
What should the 3 presidents expect for equity offered by the buyer?
Is negotiating (to get higher equity or salary) an option?
if so, How to negotiate (I am one of the 3 presidents)
If, between LOI and close, one of the 3 presidents resigns due to not liking the PE buyer’s compensation offer, does that justify or give PE buyer the option to re-trade / back out of the deal?
I’ve been told the entire M.I.P. is typically 8-10% equity. Would that be 3-5% for Group CEO & 1-1.5% for each Company President & 0-1% for any added Group CFO or COO (there are none currently)
The truth - I have to lose 20lbs of fat just to get to 10%. And I thought 5lbs = 1 inch of waist, so I’d need to get my waist down to 29
And it’s not a legacy pick because he had no seasons averaging 20 or 10 either…
Just curious what a BUYER would pay for a broker introducing them to a business that size
Is this CEO comp market?
I am partnering with a private equity firm on an MBO, buying a company from the retiring owner/CEO for $200m (current EBITDA =$20m), then will be running it as CEO.
How Are these terms - should I offer/expect higher or lower?
\-Double Lehman Finder’s Fee ($4.28m at $200m transaction)
\-5% equity (tiered over 6 years, 2% upfront plus 0.5%/yr)
\-keep market current base (I’m President currently, report to owner/CEO only)
\-Bonus of 2.5% of EBITDA above $15m/yr, and 5% of EBITDA above $20m/yr. So if EBITDA = $23m, bonus = $125k + $150k = $275k. Bonus paid quarterly an option (vs annually)?
Dude has a 7 year run averaging less than 5 FGA per 36 min….one season had almost as many stocks (steals + blocks) as field goals: 1.9 vs 1.7…his last 3 years as a starter he averaged 5.3ppg and 2spg…and on the highest scoring team (at the time) that was averaging 115ppg, the 80s Nuggets
Basically same per-36 ppg and FGA as Rodman, but as Shooting Guard
3 all-defensive 2nd Teams
#7 in DPOY twice, #8 once