Join Executive Compensation partners Adam Kaminsky and Veronica Wissel, along with Carta’s Chief People Officer Nick Avery, for the third installment of our PE compensation series. This session is a deep dive into the technical and market-driven mechanics of management equity arrangements within private-equity-backed deals.

A well-structured management equity incentive plan is a critical component of any PE transaction, ensuring alignment of the sponsor and the management team from the outset.

The panel will go beyond high-level trends to analyze the specific levers that shape today’s market. Topics will include:

  • Management rollover mechanics: Differentiating “true” equity rollovers from reinvestment of proceeds, noting tax implications for C-Corps vs. Partnerships.
  • Market standards for rollovers: Analysis of typical rollover sizes and when pari passu treatment with the sponsor is, or is not, standard.
  • Incentive pool economics: How pool sizes (typically 8–15%) are set, with a growing preference for tax-efficient profits interests over stock options.
  • Vesting, call rights, and leaver scenarios: Addressing consequences of departure, including “Bad Leaver” call rights and the use of “cap and hold” alternatives.
  • Restrictive covenants and employment terms: Aligning non-compete/non-solicit periods with equity forfeiture and severance triggers.

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