The Advisors' Blog

– 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.