Comments on: Protecting Your Best Asset https://yourexitmap.com/protecting-your-best-asset/ Free Exit Planning Tools for Business Owners Thu, 11 Jun 2020 15:33:48 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Larry Amon https://yourexitmap.com/protecting-your-best-asset/#comment-111 Mon, 12 Dec 2016 14:39:50 +0000 http://www.awakeat2oclock.com/?p=3574#comment-111 The easiest thing to do is to share the profits of the company with your employees and to give them ownership before the sale. I was not planning to sell my company, but when the right offer came in I sold and my employees shared over a half a million dollars among 35 employees. 25 years later most still remain with the company..

]]> By: John F. Dini https://yourexitmap.com/protecting-your-best-asset/#comment-110 Mon, 12 Dec 2016 13:01:25 +0000 http://www.awakeat2oclock.com/?p=3574#comment-110 In reply to David Cunningham.

Great example, David. Thanks!

]]> By: David Cunningham https://yourexitmap.com/protecting-your-best-asset/#comment-109 Mon, 12 Dec 2016 05:43:42 +0000 http://www.awakeat2oclock.com/?p=3574#comment-109 John, You are spot on about the importance of being able to get your staff to support the transition. The process starts by finding out as much as you can about the buyer’s intentions for your employees. With that information you can plan for incentives that give employees who you believe are likely to be retained, a reason to make the transition work,and offer reasonable compensation to those who are likely to be terminated. The retained employees have a better attitude if they believe that the seller cared about those who did not fit the new owner’s plans. In one acquisition situation we debated how much money was appropriate and how it should be distributed. Our decision was that the employees had exceeded normal commitments to the company, particularly in the early stages and they deserved financial reward. We voted and arrived at 5% of the capital gain on the sale. These funds were allocated on a pro-rata basis of the employee’s accumulated base salary without allowance for bonuses. On this basis a secretary who had worked for 5 years at $30,000 per year and earned a total of $150,000 received the same amount as a VP of Sales who had worked 1 year and earned $150,000. Those employees who were retained in the transition were subject to vesting requirements. Those who were released were paid a month after termination. We considered a longer delay after termination to discourage defection to get a quick cash bonus, but the conditions offered by the buyer made it unlikely that retained employees would quit. This arrangement resulted in a smooth transition.

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