Even if the positive mood on the capital markets is currently weakening, numerous companies are still considering to go public.
The process of transitioning from a private to a public company takes significant effort across essentially all of a company’s core functional areas over an extended period — often at least 6 months and, in many cases, closer to a year or longer. From a talent and compensation program perspective, the core tenet of rewarding executives and employees for driving business results (i.e., paying for performance) will remain; however, there are several key compensation program features and governance-related practices to consider when making the transition.
The most important tasks for top management and management
In a new ViewPoint, Brian Lane, Joe Mallin and Tara Tays, experts with Pay Governance, the strategic hkp/// group Alliance Partner North America and Asia, shed light on critical elements to be reviewed and established prior to an IPO including:
- Establishing/Updating a Compensation Philosophy
- Reviewing/Aligning Executive Pay Levels to Business Objectives and Competitive Practice
- Developing a Long-term Incentive (LTI) / Equity Program Strategy
- Reviewing/Establishing Severance and Change in Control Policies
The Pay Governance Viewpoint completes insights by hkp/// group experts Petra Knab-Hägele and Dr. Jan Dörrwächter in their interview on hkp.com (Jan 2021) and an article in DER AUFSICHTSRAT (Jan 2022).