Aligning management incentives in private equity

Giving portfolio company (PortCo) management teams a true ownership stake is the most effective way to align their interests with the PE sponsor’s goals. Yet selecting the right equity vehicle is far from simple. Tax treatment, administrative burden, and payout during a liquidity event all depend on the chosen incentive structure.

Learn how to structure equity ownership for PortCo success

We’ve created a “private equity blueprint” to help PE firms, PortCos, and legal teams navigate the nuances of management incentives. It covers:

  • The four main equity types: Stock options, options to acquire interests, profit interest units, and phantom equity

  • Tax and admin implications for portfolio companies and equity holders

  • Best practices for vesting schedules, repurchase rights, and management equity rollovers in M&A transactions

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