Welcome to the sixth, and final, part of the Spurstone Executive Wealth Solutions series discussing executive compensation negotiations and benefit considerations during a corporate spinoff. Through this series we are covering topics to help you get a solid understanding of how your risks could increase or decrease, where you may become more "handcuffed" and major issues to understand and evaluate.
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Part 6 - Preparation to Negotiate for YOUR Unique Needs
We have covered a broad array of issues in this mini-series. From cash and equity to retirement and legal. There are an enormous amount of complexities to understand in order to best prepare and leverage for your family needs. This is when quality financial planning is at a premium and can potentially pay dividends in your future.
When it comes down to negotiating your new compensation package, it is critical for you to have a solid understanding of three issues: 1) Your old benefits, what you may be losing 2) Your new benefits to be leveraged and 3) Your short and long term family goals. With a solid foundation in each of these areas you can begin to design a new compensation package for your negotiations.
When negotiating, it is important to know the negative implications to this spinoff. These may come in the form of lost benefits, accelerated tax ramifications from benefit vestings or increased regulatory scrutiny. Each of these represents an area to address in your negotiations. Know your facts, know your tax implications and be confident in your analysis.
When structuring your new compensation package, take this opportunity to obtain benefits or features you may not have had before the spinoff. A perfect example is a scenario in which you may have been planning to retire within the next few years. In this case, you should be negotiating for more liquid compensation or accelerated vestings to match your personal needs.
Ultimately, as with most things in life, the more educated you are the better prepared you will be. A spinoff is a fluid and dynamic environment. Now is a perfect opportunity to potentially improve your compensation package and position your assets for the opportunity of long-term success.
If you find yourself going through a corporate spinoff, as an employee or an executive, it is important that you have a team of resources to support you in this transaction. Ensure that your financial advisor, legal counsel and accounting resource are working together to analyze, plan and execute.
If you would like to privately discuss your personal financial planning, including ways to potentially reduce risk or mitigate taxes, contact our team today.
Enjoy!
Tim Golas
Partner
Spurstone Executive Wealth Solutions