Management Package Implementation & Administration
In private equity, the alignment of interests between the management team and the financial sponsor is a primary driver of value creation. This is formalised through a Management Incentive Plan (MIP), a sophisticated structure designed to reward management for delivering exceptional returns. The design, implementation, and ongoing administration of these plans are critical to their success.
Our Role
We provide a specialist, end-to-end service for the implementation and administration of management incentive packages on behalf of private equity sponsors and their portfolio companies. We manage the significant complexity of these plans, ensuring they are administered accurately, confidentially, and efficiently throughout the investment lifecycle.
We work with sponsors and legal counsel to establish the administrative framework for the plan, often using a trust or other vehicle. We then manage the onboarding of executives, executing all necessary subscription and award documentation.
We accurately track the vesting of all management equity, which often involves a complex combination of time-based and performance-based criteria. We also administer the plan’s leaver provisions, processing any required share transfers or buy-backs.
We maintain a precise and confidential ledger of all participants and their holdings, manage all participant communications, and ensure the plan remains compliant with all relevant legal and regulatory requirements.
Upon a sale or IPO of the portfolio company, we manage the calculation of the final payouts to management in accordance with the plan’s waterfall and other economic terms, ensuring an accurate and timely distribution of proceeds.
Expert and Confidential Administration
We act as an independent and expert administrator, providing a confidential buffer between the sponsor and the management team on all matters relating to the MIP. This ensures the plan is managed with impartiality and precision, building trust and allowing the management team to focus on running the business.
Complexity Managed
The economic terms of MIPs can be highly complex, with multi-layered performance hurdles and provisions for various exit scenarios. Our team has the specialised expertise to interpret and administer these intricate terms correctly, ensuring the plan operates exactly as intended and that all participants receive their correct entitlement upon a liquidity event.
Confidential Consultation
For expert implementation and administration of your management incentive plans, please contact us.