March 3, 2020
Examining Change-in-Control Arrangements
– Lynn Jokela
Arrangement for payments upon a change-in-control continue to draw scrutiny from many, including proxy advisors and activist shareholders and if excessive, they often invite public criticism. Here’s a report from Alvarez & Marsal, with commentary from Equilar, that might help boards and comp committees analyze and structure executive change-in-control arrangements to demonstrate accountability.
The report analyzes executive change-in-control arrangements at 200 U.S. publicly-traded companies (top 20 companies based on market cap in 10 different sectors). Among other things, the report provides insight into the prevalence of double-trigger vesting provisions, excise tax gross-ups, change-in-control severance multiples and the breakdown of change-in-control benefit values by industry sector.