Change in Control Plan

Objective: Promote ownership mentality, reduce turnover of key talent and fuel revenue growth

Company Profile: Manufacturing Company; $45 million in revenue; 225 employees

Growth Goals: Reach $100 Million in Revenue within 8 years through acquisitions and product diversification then sell the company

Growth Barriers: Shortage of premier leadership talent and short-term focus in existing workforce

Compensation Issues: Salaries and bonuses were slightly below market; no plan to promote long-term value creation

Solution: "Change-in-Control" Plan. The Plan established different levels of value for employees depending on the size of the ultimate transaction (the higher the value, the larger the pool.) Semi-annual meetings were established to update employees on Plan progress and potential value.

The company went through several years of reduced profits during recession. However, owners continued to communicate the Plan's potential return once profits turned. Last two years' results have improved dramatically. Owners can now communicate specific targeted values for employees tied to possible transaction prices.

Owners report:

  • Increased ownership mentality evident among management team
  • Leadership team turnover has been eliminated (except for owner initiated action)
  • Revenue after five years was approaching $85 Million

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