March 21, 2024
Trends in Change in Control Benefits
A&M's 2023/2024 Executive Change in Control Report was recently featured in the AIRA Journal article, "Trends in Change in Control Benefits".
Authored by A&M's Compensation and Benefits Practice Managing Directors, J.D. Ivy, Allison Hoeinghaus and Brian Cumberland, this report analyzes change in control arrangements among 100 companies in the S&P Composite 1500 Index and identifies market trends to help companies evaluate their practices against their peers.
Key findings include:
- Average change in control payments remain substantial, averaging ~$23.1M for CEOs and ~$7.5M for CFOs.
- The most common cash severance multiple in connection with a change in control is between 1.99 and 2.99 times compensation (60% for CEOs and 42% for CFOs).
- The prevalence of double trigger vesting for equity awards remains high, utilized by 88% of companies.
- Accelerated vesting of equity awards continues to be the most substantial CIC payment, representing, on average, 63% and 58% of the CIC payments for CEOs and CFOs, respectively.
- Best-net provisions continue to be prevalent, appearing in ~40% of all CIC arrangements studied. Additionally, we observed this provision in 60% of the top 10 deals during 2022.
