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Equity Incentives at Publicly Traded vs. Private Equity Owned Companies: Is There a Difference?

Equity Incentives at Publicly Traded vs. Private Equity Owned Companies: Is There a Difference?

Equity compensation for senior management of private equity owned companies is very different from that of publicly traded companies. While both types of companies share a common principle of rewarding management based on an increase in shareholder value, fundamental differences in the investors and their potential holding periods drive divergent equity compensation practices. This article co-authored by James F. Reda and Michael S. Sirkin is published in the June 2020 issue of Thompson Reuters’ Journal of Compensation and Benefits, and appears here with permission.  It represents one of the few recent publications that reviews the differences in equity compensation among private equity owned companies and publicly traded companies.

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James Reda

James F. Reda, Managing Director, works with both public and private organizations in planning, creating, and implementing incentive programs. Jim also advises companies on incentive strategy, including long- and short-term senior executive employment arrangements, change-in-control metrics, business combinations, shareholder rights, and corporate governance issues. He is a recognized expert in the area of integrating incentive and corporate strategies. Jim has more than 30 years of experience specifically in the area of senior executive compensation. Prior ...

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