Compensation consultants can provide insight on compensation as well as incentives and help you gauge potential reactions from investors. Considerations include:
- Include board compensation as you develop a compensation structure that reflects being a public company.
- Talk to your legal advisors about adopting public company equity plans that will meet the future needs of the business. Compensation changes after going public can be much more challenging than choosing the proper structure before going public.
- Arrange for repayment of any loans to directors or officers prior to filing the Registration Statement.
- Consider obtaining key-man insurance for key executives.
- Prepare employment and/or change-of-control agreements, if needed.
- Verify that existing employee benefit plans comply with ERISA and other legal requirements.
- Revise existing employee benefit plans to comply with securities and tax law requirements.
- Most companies have a 180-day IPO lock-up period, and investment bankers expect all or substantially all stockholders and equity holders to sign lock-up agreements prior to the IPO to create stability in the trading market. Understand what RSUs or other equity awards will vest or settle during this period and consider whether the company will have enough funds on hand to cover withholding taxes associated with those awards.