As employee tender offers increase in frequency,
so too has the scrutiny applied by auditors. Among the questions
asked during these reviews: Is a buyback a straightforward sale of
stock, or is it in part a form of compensation for employees?
The answer can have big implications for the transactions, both
in terms of how much money participants get to take home, and what,
if any, extra costs companies need to pay. As with many issues in
the evolving secondary-transaction field, the answer isn't
black and white.
We recently spoke with
Cindy Hess,
Mark Leahy, and
Shawn Lampron, all partners at
Fenwick & West, about the laws and regulations concerning
compensation, how they're applied to employee tender offers,
and what steps companies can take to maximize the benefits to
employees, and reduce cost and future risk.
