In a competitive business environment attracting, rewarding and retaining key executives is crucial to the success and long-term sustainability of any business. How do equity incentives fit within a compensation structure? Equity-based incentives complete the spectrum by filling the void between short-term and long-term compensation.
Prairie has extensive experience in designing and implementing executive retention programs that can result in increased employee engagement and aligns the interest of management with the interests of the shareholders.
Synthetic Equity Awards
Synthetic equity plans, such as stock appreciation rights, phantom stock, and incentive awards, are cash-based “equity-like” plans that offer alternatives to real equity. The benefit of these plans is that legal ownership of the company does not change, meaning the ownership structure of the business remains unaltered. However, synthetic equity is dilutive with respects to its claim on the value of the business.
Real Equity Awards
Real equity award plans, such as qualified and nonqualified stock option plans and restricted stock programs are real exchanges in the ownership of the company.Since legal ownership does change hands, the structure of the business changes. These new shareholders have legal claim to the business. New equity awards are dilutive with respects to the ownership of existing shareholders.
Our clients use our executive retention services for….
because they want to….
Valuation is the foundation for everything we do at Prairie Capital Advisors.
