Turnaround Incentive Plan Design
Private equity firm in creditor protection looking for an executive incentive plan in support of its primary objective to return capital to credit-holders within the next 5 years.
Existing CEO contract in place, requiring consideration to obtain agreement / align interests across the executive team. 5-year objectives are challenging to set with certainty. A cash-based incentive plan extending beyond 3 years is challenging under Canadian tax rules
We identified the gaps to market. Costing analysis helped to determine the required spend to close the gaps over time, by individual directors and overall. We flagged other design features for monitoring over time, including the potential introduction of RSUs for directors and increases to committee chair compensation.