A Guide To Change-In-Control Arrangements

Conducting thorough due diligence with respect to a target company's compensation plans, employment agreements, employee benefit plans and employee policies is an integral component in evaluating a potential merger or acquisition. For an acquiror, another significant piece of the overall picture with respect to compensation, however, is the impact of a merger or acquisition on executive compensation and the payments and benefits to be provided to executives upon a change-in-control. Below is a brief summary of what constitutes a change-in-control event and some of the benefits that executives typically receive upon a change-in-control.

Change-in-control (CIC) arrangements

According to Meridian Compensation Partners, the primary purpose of CIC provisions (also known as golden parachutes) is to keep executives focused on pursuing all corporate transactions that are in the best interests of shareholders, regardless of whether those transactions may result in