January 31, 2022
IPO Readiness: What Comp Committees Should Know & Do
Despite last week’s wild stock market fluctuations and all of the other factors pointing to a dampened year for IPOs, there are still plenty of companies that are looking to go public in 2022 (and plenty of SPACs that want to help them). Once a company’s governance structure is in place, this 7-page Pay Governance memo gives a good overview of what compensation committees of pre-public companies should do as they prepare for the big debut. Here’s the executive summary:
• Compensation program planning is a critical part of the comprehensive and time-consuming process necessary to transition from private to public ownership.
• There are several facets of the compensation program to consider through the transition, such as:
— Establishing/Updating a Compensation Philosophy
— Reviewing/Aligning Executive Pay Levels to Business Objectives and Competitive Practice
— Developing a Long-term Incentive (LTI) / Equity Program Strategy
— Reviewing/Establishing Severance and Change in Control Policies
• Advance planning, incremental decisions, and careful analysis of external and internal factors in each of the above areas can help.
– Liz Dunshee