September 8, 2020
Executive Compensation In Times of Distress or Restructuring
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A&M featured on NACD-Online: Preparing for Board Compensation in Times of Distress |
Executive compensation programs are one of the most important levers in a restructuring. We assist in developing and defending appropriate compensation programs to motivate and reward key executives and employees during the restructuring. Our professionals can assist companies with the design, negotiation and benchmarking of Key Employee Incentive Programs (“KEIPs”), Key Employee Retention Programs (“KERPs”), Emergence Equity Programs and Severance Programs.
As part of this comprehensive process, we can assist with the following:
- Overall design of the KEIP, KERP, Emergence Equity and Severance Programs, including the number of participants, aggregate payout potential, performance measures, and average potential payout per participant
- Over the past 15 years, we have developed a robust database of KEIPs, KERPs and Emergence Equity Programs approved since the enactment of The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”) that will be drawn upon in designing Bankruptcy Compensation Programs. Currently, our database includes:
- Pre-restructuring planning to construct flexible and resilient compensation programs that are appropriate in the restructuring context for both executive and broad-based populations
- Benchmarking analyses of the potential amounts payable, as well as the structure of the KEIP, KERP and Emergence Equity Programs
- Examination, in conjunction with the Company and Bankruptcy Counsel, of which individuals that may be considered “Insiders”
- Negotiation of the KEIP, KERP, Emergence Equity and Severance Programs with other Stakeholders
- Testimony in Bankruptcy Court on the reasonableness of the Programs in design and potential payout amounts
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