January 11, 2017 Executive Compensation Executive & Director Pay Design Articles

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How to Deal with Equity Holdings During a Spin-Off

Published January 11, 2017
Published January 11, 2017

In today’s corporate environment, many companies face increasing pressure to deliver strong returns year in and year out. This pressure can be the catalyst for strategic business conversations that lead to acquiring, consolidating, divesting, or spinning off businesses.

Executing a spin-off creates an opportunity to unlock company value — value that is based on the belief that the separation of two businesses into stand-alone entities will create more value than a single business can deliver. Some notable and successful spin-offs include PayPal from eBay, Kraft Foods from Mondelez International, and Synchrony Financial from General Electric.

Each restructuring event has a unique set of compensation and benefits challenges from a philosophical standpoint (e.g., defining a new rewards strategy) and a tactical standpoint (e.g., modifying existing incentive awards held by employees).

A company intent on spinning off a business may encounter the most complex challenges as it determines how to structure the pre – and post – spin organizations and how to create compensation and benefits programs from scratch for the spin company.

View the full article as it was originally published.

Michael Gorski

Michael Gorski

Principal

Michael has 15 years of experience in the executive compensation industry. He has worked extensively across all industries and has expertise working with both public and private compensation structures, including pre-IPO transitions. 

Prior to joining Semler Brossy in 2012, Michael was Director of Professional Services at Equilar Inc., the leading provider of corporate leadership data solutions.  Michael joined Equilar in 2007 as a research analyst after graduating from the University of California at Berkeley with a B.A. in Applied Mathematics (Economics).

Of Interest

Applied mathematics

Industry Experience

  • Technology
  • Manufacturing/Industrials
  • Consumer Products
  • Healthcare

Featured In

  • Workspan
  • NACD/Directorship
  • NASPP
  • NACD BoardTalk

Authored Insights

This article was originally published in Workspan.

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