In this episode we discuss: Executive compensation and option grants. We are joined by Daniel Harris, Exec Compensation Partner.

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We chat about the following with Daniel Harris:

• What to consider when negotiating equity packages.
• What are the different equity schemes, such as sweet equity, and their implications?
• When to be aware of with tax implications and when to seek expert advice.
• Paying attention to strike prices and their impact on the value of equity.
• How to align incentives and interests between founders, management teams, and employees.
• Is it possible to ensure alignment between company strategy and compensation structure?

References

• www.linkedin.com/in/daniel-harris-a7333511
• www.pwc.com

Biography

I lead the Reward team in the Regions and have over 20 years’ experience of advising companies (both public and private/ private equity backed) and their remuneration committees on all aspects of executive compensation, including the design and implementation of tax efficient and commercially effective pay structures and management incentive plans in the UK and overseas.

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Summary

13:56 Introduction and Relevance of the Topic

02:43 Exploring Different Equity Schemes

24:33 Equity Structures in Different Stages of a Company's Lifecycle

26:47 Considerations for US Taxpayers in Negotiating Equity Packages

30:56 Key Elements of a Good Equity Package

34:13 Changes in Strike Prices and EMI Scheme in the UK

36:16 Balancing Performance-Based Vesting

39:45 The Benefits of Accelerated Vesting

41:00 Understanding the Differences in Equity Compensation Systems

41:57 Main Takeaways