Richter

Compensation advisory
Attracting, retaining, and incentivizing top talent is becoming increasingly challenging in today’s landscape. Today, the focal point of many business discussions revolves around the talent that leads and supports organizations, underscoring the indispensable value of Compensation Advisory Services that are tailored to your needs.

A well-designed compensation program including base salary and employee incentives [short-term incentive plans (STIP) and long-term incentive plans (LTIP)] will assist you in incentivizing your key talent to achieve corporate and ownership objectives while ensuring market competitiveness. For private businesses that are highly reliant on talent, employee incentive plans are powerful tools that are becoming more prevalent and critical to attract and retain talent. A tailored and thoughtful incentive plan will inspire your team and benefit your family intergenerationally by strengthening your succession plan and enable you to achieve your personal and familial goals.

At Richter, we understand that as private and often family-owned business owners, you may have concerns around employee share ownership or similar plans including phantom equity, stock appreciation rights (SAR), employee-ownership trust, stock option plans or otherwise. When designing employee incentive plans, in order to minimize your concerns, we design plans that consider:

- Complex family dynamics
- Multiple share structures and entities
- Limited liquidity for the shares
- Current and future tax and estate planning
- Tax optimization / efficiency
- Varying dividends
- Related party transactions and conflicts of interest

Our expertise working with family and private businesses allows us to navigate the complexity and delicate nuances of the private enterprise sector.

When establishing an attractive and competitive compensation framework, there are certain best practices to follow, such as:

-Analyze base salaries in relation to comparable positions, industries and the employee's level of contribution to the organization;
-Develop short-term incentive plans (STIs) in the form of a percentage of base salary based on objectives and key results at both organizational and individual levels, or similar; and
-Develop long-term incentive plans (LTIPs) aimed at promoting the creation of value and the sharing of this value with employees by means of an equity program, equity-type instruments or a long-term bonus program.