Phantom Stock Allows Executives to Get the Benefits of Equity Compensation from Family Businesses9/11/2017
On September 6, 2017, CEOWorld magazine published an article I wrote on “Getting the Benefits of Equity Compensation from Family Businesses through Phantom Stock.”This article was designed for CEOs, C-suite executives and other senior executives who currently work in a family business or are offered a position in a family business and receive now or are offered NO equity compensation because most family businesses do not issue equity to non-family members.
My article discusses the use of Phantom stock as a mean to give the executive a substitute to equal for him or her all the benefits that stock, options or RSUs would provide to the executive in a non-family business. Techniques used in the past and offered to the reader can produce a true “win-win” by providing key benefits to the family business as well as to the CEO or other senior executive, including the following
My article includes a hypothetical example, where a 55-year-old executive is to take the CEO position as successor to the 75-year-old family CEO. In this example, the successor CEO negotiates for the establishment of a phantom stock plan as a condition to taking the position. The intention is that the successor CEO receive phantom stock under the phantom stock plan as an important part of his (her) executive compensation package and that the plan would continue after that to enable the successor CEO to use phantom stock to recruit other non-family senior executives to further bolster management of the family business. To see my full CEOWorld magazine. article, go to LINK: http://ceoworld.biz/2017/09/06/getting-the-benefits-of-equity-compensation-from-family-businesses-through-phantom-stock/ or my website: https://www.executiveemploymentattorney.com/articles-section/getting-the-benefits-of-equity-compensation-from-family-businesses-through-phantom-stock/ With more than 12.4+ million-page views, CEOWORLD magazine is the world’s leading business magazine written strictly for CEOs, CFOs, CIOs, senior management executives, business leaders, and high net worth individuals worldwide. It is my hope that this article will be helpful to (1) CEOs and senior executives working in family businesses, (2) CEOs and senior executives considering taking positions in family businesses, and (3) leaders of family businesses seeking to recruit non-family members as the new CEO or other senior executives. If you or any colleague of yours has a need in this area, please do reach out to me, your executive employment lawyer, at [email protected] or call 617-875-8665. On July 10, 2017, CEOWorld magazine published an article I wrote on “Restricted Stock And Other Equity Options For Your Executive Compensation Package” This article was designed for CEOs, C-suite executives and other senior executives who are negotiating stock, options, RSUs or other equity as part of their compensation package.
The article first discusses the key ways to assure value in your executive equity compensation package –
The article then goes on to discuss the merits of Stock Options both, non-qualified and incentive stock options, Restricted Stock and Restricted Stock Units (RSUs). The article indicates that in the high growth and turnaround situations, the much better choice is to get all or a significant part of your equity structured as Restricted Stock, which offers these. significant advantages:
My article also discusses how RSUs structure is quite desirable in companies where high growth is not expected and the executive wants to be assured of equity that will have value. For more information on RSUs, see my February 2017 CEOWorld article focused entirely on RSUs – LINK: http://www.executiveemploymentattorney.com/articles-section/the-advantage-of-rsus-in-your-ceo-compensation-package/ My article on “Restricted Stock And Other Equity Options For Your Executive Compensation Package” was published July 10, 2017 by CEOWorld magazine. To see my full article, go to http://www.executiveemploymentattorney.com/restricted-stock-and-other-equity-options-for-your-executive-compensation-package/ With more than 12.4+ million page views, CEOWORLD magazine is the world’s leading business magazine written strictly for CEOs, CFOs, CIOs, senior management executives, business leaders, and high net worth individuals worldwide. It is my hope that this article will be helpful to senior executives who are negotiating equity terms as part of their compensation package going into a new position or in connection with a raise, promotion or change of control. If you or any colleague of yours has a need in this area, please do reach out to me, your executive employment lawyer, at [email protected]. In this post, I provide a link to an invite only presentation for the Vistage community at the conference Center at Waltham Woods, Massachusetts that I gave in January 2015. My topics were -
To view the outline of the “6 Key Points Every CEO should have in his or her Employment Offer”: https://www.slideshare.net/RobertAdelson/6-critical-items-every-ceo-needs-in-his-or-her-employment-offer If you are a CEO or C-suite executive and would like more information on this presentation or need advice with your own job offer or employment contract, please do contact me at [email protected] One week ago, on February 28, 2017, CEOWorld magazine published an article I wrote on “The Advantage of RSUs in Your CEO Compensation Package.” For CEOs, C-Suite executives and other senior level executives, equity compensation is a key part and often the most important part of their compensation package. For many senior executives, equity means stock options or restricted stock. But in many circumstances the better choice is RSUs, restricted stock units. RSUs are most useful in mature companies where the CEO or C-suite executive takes a position where stock has considerable value, but growth is still expected in the public company or perhaps an IPO or liquidity event is not far off. In that circumstance, the key advantages of RSUs is that taxation would be put off until vesting has occurred and the company would typically pay for or assist in payment of the taxation that would arise, and is willing to do so because vesting has already occurred.RSUs are even more valuable to the CEO or senior executive when he or she takes over in a turnaround situation in a mature company where there is no assurance of appreciation and the CEO needs assurance of a floor in his or her equity value. RSUs also offer a clear advantage over stock options to CEOs and C-Suite executives because RSUs after vesting always retain some value. RSUs effectively have a floor on value. They can never go underwater and become worthless as often happens with stock options.
My article discusses these subjects –
To see my full article, go to http://www.executiveemploymentattorney.com/articles-section/the-advantage-of-rsus-in-your-ceo-compensation-package/ With more than 12.4+ million page views, CEOWORLD magazine is the world’s leading business magazine written strictly for CEOs, CFOs, CIOs, senior management executives, business leaders, and high net worth individuals worldwide. The terms of the RSUs may be set out in the employment agreement or a separate grant agreement. Either way, the CEO or C-suite executive needs to be aware of a number of important terms to be reviewed and negotiated in RSU agreements. With RSUs, as with restricted stock and options, bonus, severance and other key areas of the executive’s employment agreement, it is important to retain trained tax and executive employment counsel. If you or one of your colleagues is a CEO or senior executive negotiating a compensation package and has questions on RSUs or terms to include in that package, I am glad to assist. please do reach out to me at 617-875-8665 or email [email protected]. |
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