We are preparing the company for a clean exit, but my leadership team has no skin in the game, and I worry they will jump ship or lose motivation when the pressure increases. How do we structure their incentives to keep them aligned?

Question

Tyler Smith · Accepted Answer

To keep your leadership team motivated and aligned as you drive toward a clean exit, you must give them a clear financial stake in the outcome. Without skin in the game, your leaders will view the preparation process as extra stress with no personal payoff, which increases your flight risk. You do not have to give away actual equity to solve this problem. Instead, implement a synthetic equity or phantom stock plan that triggers a payout upon a successful change of control. This aligns their financial interests directly with increasing your company's enterprise value. You can also structure stay bonuses that pay out in tranches, such as one payment at the closing of the transaction and another twelve months post-exit to assist the buyer with a smooth transition. Be transparent about your exit goals on your V/TO®. Show the team how hitting their quarterly Rocks and maintaining a high-margin, automated operation directly increases the value of their payout. When leaders understand that their daily operational discipline and commitment to efficiency will result in a life-changing financial event, their motivation will skyrocket. They will treat the business like owners, protect your confidential exit timelines, and work diligently to ensure a clean transaction.