Post-Merger Employee Compensation
Average Employee Retention Bonus After Acquisition
A 10-slide presentation of an M&A employee retention bonus program.
Guidelines for Determining M&A Retention Bonuses
Payout Terms and Conditions
Engagement to Departure Process
Major Events (Like an Acquisition)
Events That Trigger Disengagement
Four Fundamental Human Needs
7 Hidden Reasons Employees Leave
M&A Synergy-Based Incentive Plan
Synergy Plan Overview
- Executives have a synergy-based incentive target on top of the current annual incentive plan (AIP)
- Department heads will have the ability to allocate discretionary pools to other employees
- Eligibility: Management plus other employees involved in workstreams
- Synergy goals are set as an add-on to the current AIP
HR M&A Integration Compensation & Benefits Playbook
M&A Integration Compensation & Benefits Playbook covers over 190 tasks grouped in these categories:
1.0 Integrate two companies on one base pay program
2.0 Integrate 2 companies to same annual bonus programs
3.0 Integrate Acquiree employees to Acquirer equity program
4.0 Integrate 2 companies to same miscellaneous compensation policies
5.0 Other Issues
1.0 Retirement - Pension, 401(k), and Retiree Welfare Plans
2.0 Medical, Dental, and Vision Insurance
3.0 Life, AD&D, SLTD,LTD, Long-Term Care, and BTA Insurance ...
Do "Stay Bonuses" Really Work?
Here’s how the familiar story unfolds…
Company A acquires/merges with Company B. Part of the logic driving the deal is that, in combining the two firms, headcount can be reduced. Accounting runs the numbers and promises annual payroll savings of, let’s say, $20 million.
But, of course, you can’t afford to let all those people go immediately …
M&A Talent Selection Plan
- Acquired Co Employees Impacted In 3 Ways
- Required Co Employee Selection and Placement
- Engaging with Acquired Co Employees Pre-Close
- Rules of Engagement
- Selection Process for Functions Being Scaled Back
- Step 1: Workforce Planning Results in Acquirer Talent Needs
- Step 1: (Cont.) Workforce Planning Identifies Acquired Co Positions Being Affected
- Step 2: Candidate Pooling Identifies the Talent to Be Assessed
- Step 3: Selection Will Be Driven by Assessment of Experience and Performance
- Step 4: Employees Not Selected Will Be Considered for In-Placement and Out -Placement
- Guidelines for Selection
- Service Eligibility
- In-Placement Services
Staffing and Retention Integration Project Plan
Over 70 Staffing and Retention Activities Grouped into these Categories:
- Finalize Organizational Structure for All Functions
- Deploy a Staffing Process to Assess, Select, and Announce All Levels of the Organization below the Management Team
- Management Team Design Tools to Retain Key Talent Prior to Close and Throughout the Transition Period
- Develop a Process for Managing Reductions in Force and Administering Separation Packages and Outplacement Services
- Design an Issue-Free Day 1 From the Employee Perspective
- Provide the Communication Team with Guidance on Messages Related to Retention, Severance and Staffing
The Argument Against Waiting to Make Staffing Changes
The top management in the acquirer might argue that it is best to allow some time to get to know the abilities and potentials of the management team in the target organization ...
Be Willing to Be Unfair in M&A
Mergers always require you to make sacrifices. It’s a time of tradeoffs. Compromises. Less than perfect solutions. So far as the people issues are concerned, it’s like watching a card game—some win, some lose, some break even ...
Pride and Prejudice: The Politics of Merging Boards of Directors
Some 200 years ago, Jane Austen–one of Britain’s best-loved authors—wrote a famous novel about marrying. And money. Deep down that’s actually what mergers are about, too, so I thought to myself, “Maybe her classic, Pride and Prejudice, has parallels for merger integration.” ...
Interviewing Guidelines for Staffing NEWCO
As a hiring manager, you may have participated in the interview process when hiring externally at ACQUIRER or TARGET. The staffing of NEWCO will be somewhat different from what you’ve experienced previously …
Organizational Announcements: Communications Process, Schedule, and Format
- Functional leaders and/or HR will work with Communications to publish an informational article in the integration newsletter. Broad employee announcements will only be made after all affected employees have been personally communicated with.
- Employee severances will be handled within the functions, in conjunction with HR. No formal communication will be issued regarding individual severances. Exceptions will be handled on a case-by-case basis.
Most Onboarding in M&A: Too Little Too Late
Acquiring and merging a company is like hiring en masse. You spend a ton of money on the deal, and your payroll immediately explodes because of this huge new batch of employees ...
How to Manage Staff Reductions and Separations in Mergers
In a merger, acquisition, or takeover, reductions may be required immediately after the announcement of the transaction, or they may be required after work is transitioned from a department. In either case, you should prepare for the following necessary actions: ...
Ten Common Mistakes Managers Make During Job Status Notification
Job status notification is a difficult challenge that warrants careful planning and handling. Avoid the following typical mistakes when communicating job status information following the close of the deal: …
Mergers and Acquisitions: The Process for Making Staffing Decisions
First, the new owner should not be tempted to “go with the familiar person.” This tactic does not sufficiently minimize the risks involved.
Second, there is real danger in deciding to “Do nothing and wait for the dust to settle.” ...
Acquirer's Approach to Talent Selection
Although the integration will bring some job eliminations and job changes, the majority of roles within the combined organization will not be impacted. A necessary part of any integration is defining the new organization and opportunities as well as eliminating duplicate roles. When this occurs, we will communicate with impacted employees their specific options.
Our goal is to share the majority of organizational decisions within 90 days after Close ...
Why Not Evaluate the Acquired Company's Management on Corporate Profits?
This is the most traditional approach, and it is good so far as it goes. Certainly, it does pay respect to salient—even critical—data. But good numbers can mask weak talent …
What's Next?: The Hard Core Truth About How to Get Hired
Frankly, almost all of us are amateurs at job hunting. If we find ourselves needing to make a career move, we may pick up a book about job search and start cramming. We might check out a couple of websites for advice on resumes or how to interview.
Of course, most people just feel their way along until they land a job offer. And they make a lot of rookie mistakes ...
Onboarding Acquired Company Employees
When an acquisition will be integrated and its current corporate identity reshaped, the parent (or surviving) firm has an obligation to bring acquired employees into the fold. This calls for comprehensive, sustained onboarding …
Employee Retention in M&A
Post-Merger Staffing and Retention
Discuss how all retention, severance, outplacement, transition and synergy-linked incentives will support the goal of engaging and motivating people to perform and behave appropriately through the transition period
- Meeting Objectives
- Timing of Announcement of Job Status to All Employees
- Timing Dependencies
- Timing of Announcement of Tier 1 Organization Design and Staffing Decisions
- Pre-Close Retention Incentives Acquirer
- Severance for Acquirer Employees Post -Close ...
M&A Employee Retention Playbook
Minimizing Employee Losses
People Integration Strategy
Timing of Retention Phases
- Phase 1
- Phase 2
- Phase 3
- Retention Matrix
- Understand Employee’s Motivators
- Develop and Execute an Action Plan to Address Motivators
- Sign Up and Train Key Recruiters Early ...
Re-Recruitment Analysis and Plan
During mergers, people reexamine how the organization being created fits with their personal goals and ideals. As leaders, it is important to identify those individuals most critical to the success of the merger and “re-recruit” them to stay. This document is intended to give leaders a framework for organizing their thoughts on re-recruitment. The key is not to focus only on those viewed as a risk for leaving, but also on those whose departure would have a significant negative impact on the organization.
How to Manage the Impact of Mergers & Acquisitions on Employee Morale
The trust level drops dramatically when major changes are made in an acquired company post-sale. Morale heads south. Loyalty, the tie that binds, comes unraveled. Job stress hits new highs ...
A Primer on Talent Assessment and Retention
“AMA study found that 25% of top performers leave within 90 days of major change event”
I. Reasons Why Talent Leaves:
- Targeted by recruiters/competition
- Net/net perceive they are “worse off”
- Perception of loss of sponsor/access to key decision makers
- Changes to reporting relationships/key job responsibilities
- Loss of compensation/benefits
- Perception job will not meet career goals
II. Talent Assessment: ...
Employee Retention Bonus Agreement
This Retention Bonus Agreement (the "Agreement") is made and entered into effective as of October 1, 2030 (the 'Effective Date"), by and between John Doe (the "Employee") and ABC, Inc. (the "Company").
A. The Company has announced the execution of an Agreement and Plan of Merger pursuant to which the Company may be acquired by another company. The Board of Directors of the Company (the "Board") recognizes that such announcement can be a distraction to the Employee and can cause the Employee to consider alternative employment opportunities. The Board has determined that it is in the best interests of the Company and its stockholders ...
Staffing and Retention HR Checklist for an M&A Integration
Assessment of Turnover and Discussion of Retention Needs
- Recent turnover?
- Status of Critical Operational Talent list?
- When will Critical Operational Talent discussions begin?
Status update on memo regarding org. design and synergies
- Start/end date to submit final synergy templates to the IMO?
- Finance Team’s/ Staffing & Retention Team’s involvement in the org. design/synergy refinement process?
- Process/instructions for org. design?
- How many tiers in entire organization?
- Review and approval of org. design and final synergy templates?
- All components drafted? Content complete and stable?
- Formatted for ease of use?
- Approved by legal of both companies? (Outside legal approval required?)
- Produced? o Approved by Core Team? o Distributed to MT?
- How/when will the Staffing Toolkit be distributed to hiring managers below Tier 2?
Status Update on Tier 2 Interviews and Selection ...
The Three Sources of Management Turnover in an Acquisition
One of the most likely bailout points is in the top management ranks …
How to Retain Key Talent in an Acquisition
Organizations have a hard enough time hanging on to good talent these days. Careers have become more a collection of assignments than a collection of seniority pins and gold watches. Work has come to be seen as more an activity than a place …
How to Keep Your "A Players" in a Merger: Six Guidelines
One unfortunate reality of mergers and acquisitions is that good people sometimes leave…on both sides of the deal. Whether it’s a trickle or a flood, all managers on both sides need to pay attention …
Employee Retention After an Acquisition
How to Re-Engage and Re-Recruit Key Players in M&A Integration
- Re-engage and re-recruit yourself first!
- Conduct “Stay” conversations
- Engage multiple methods of 2-way communication
- Give key talent meaningful work to do …
The Case for Leadership Due Diligence in M&A
Traditionally the merger due diligence process has focused on legal and financial issues—e.g., contractual matters, litigation points, economic and fiscal considerations, etc. Obviously that’s an important exercise.
But when mergers fail, as they too frequently do, the odds are it reflects a sloppy job ...
Pre-Close Leadership Assessment
Leadership Qualities Rated
Understands overall business goals; maintains or increases financial performance and market share through the application of sound business principles and knowledge.
Demonstrates the ability to grow our business in both current customers and the marketplace; knows and understands customer needs and anticipates opportunities.
Works across internal, external and geographic boundaries to deliver customer value; partners with individuals at all levels and in all functions to ensure that organizational objectives are met ...
HR Due Diligence Tool
9-page list of data to gather and assess HR
Identify potential synergies/opportunities in these categories:
- Management Team
- Compensation and Benefits
- Recruiting ...
Talent Assessment of Chief Operating Officer
Results from Assessment of COO (name of executive and details have been changed).