Business Exit Planning

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Using Short-Term Key-Employee Incentives to Increase Sale Price

One of a business owner's greatest challenges is to attract, motivate, and keep key employees. As owners approach the end of the marathon of exiting their business, often tired and distracted by everything they've done, they begin to assume that it is no longer worthwhile to keep and motivate key employees. However, keeping key employees is not only worthwhile but also necessary if the business is to be sold at the highest possible price.

A basic premise of key-employee incentive planning is to keep the key employee as a long-term, contributing member of the company. Consequently, incentive plans incorporate relatively long vesting schedules and provide benefits that are relatively moderate in the early years but become substantial as the years pass (usually after the employee has participated in a plan for at least five years).

Employee Incentive Planning
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