Pearl Meyer is a strategic content partner for the National Association of Corporate Directors (NACD). Pearl Meyer is a key contributor each year to the annual NACD Governance Challenges Report. This article was published in the 2016 report M&A Oversight.
While golden parachutes, excise taxes, gross-ups, and other change-in-control matters are critically important in an M&A, the compensation committee’s role can and should go beyond these technical topics. The highly strategic and disruptive nature of an M&A indicates there are many key areas where compensation can help guide successful completion of the deal and set the stage for the new entity.
Here, we review questions directors should be asking, as well as go in-depth on the impactful change-in-control issues that can be avoided.