Boards of directors play a key role when it comes to M&A transactions. At the bottom line, they have to determine whether the deal on the table is in the best interests of the company and its shareholders.
After a quiet 2020 as the Covid-19 pandemic took hold, M&A activity roared back last year. Now the dealmaking environment is again characterized by a great deal of uncertainty. At the same time, many investors have been casting a more critical eye over executive compensation packages and practices.
Robin Ferracone, founder and CEO of governance and compensation specialist Farient Advisors, believes that uncertainty around M&A deals should be kept to a minimum and that executive pay planning is a key element to successful transactions.
In the latest episode of our podcast, host Jeff Cosette speaks with Ferracone about how boards and governance teams can best approach these issues. An important part of that, she says, is putting together the right compensation packages for those individuals who will be leaving as part of the deal, those who will be staying on for a limited amount of time and those the company wants to retain.
‘With the great resignation going on, we’re seeing more and more companies putting together equity pools to [keep] people in the new company and stay-bonuses… possibly a special integration bonus. Those can be very powerful to get people rowing in the same direction toward some common goals,’ Ferracone notes.
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