Solving the Buy-in Paradox
Top talent drives company growth and value. Higher company value dissuades top talent from buying into an illiquid company. Frustrated talent leaves and company value falls.
Top talent drives company growth and value. Higher company value dissuades top talent from buying into an illiquid company. Frustrated talent leaves and company value falls.
Equity models are strategic because: “Who gets What” defines “Who You Are!” That is, the way owners share value with those who create it has a profound impact on the firm and the owners’ ability to attract, retain, and reward senior talent.
Business owners and executives understand the painful truth: taxes often eat up nearly 50% of their high-earner compensation. Once compensation is paid, a short list of deductions, losses, and credits are the only way to lessen the tax bite.
After guiding over 100 ownership teams on runway planning, I am often asked: "what is the most powerful lesson leading to a successful owner succession process?" What leads owners to successfully take off and land?
I have never met a business owner who made the following request: "Let's put in a long-term incentive plan to destroy company value". Sounds implausible, right?