Transaction-related Retention Plan Design

Background

Personal challenges required the abrupt exit of the sitting CEO and prompted the Board to quickly prepare the company for sale. Management and key employees were required to be retained through the transaction close to stabilize the business and ensure continuity of operations.  

To support the client, Southlea: 

• Developed a key employee retention plan, along with a tool to identify recipients and determine appropriate award levels, considering market practice in similar organizations and circumstances;  
• Provided guidance on enhanced severance arrangements in select regions (e.g., U.S.) where relevant / required; and 
• Calculated the overall cost to the organization on a fixed and contingent basis.

Challenges

The unique circumstances of the CEO exit garnered significant media attention, requiring the urgent development of a retention plan and giving employees a unique and favourable bargaining position.   

Different contract terms and employment standards / regulations globally meant bespoke arrangements were required in each operating region. 

Results

The remaining management team and key employee population globally was retained through the successful search for an acquirer and close of the transaction.