Design of incentive systems
Ensure your company's growth with a good incentive system
We help you establish a thoughtful stock option structure that aligns executives with the company's growth, retains critical talent and protects existing shareholders from unnecessary dilution.
CONTACT US
How do we ensure a good incentive system design?
Strategic diagnosis
We start by understanding your value creation objectives and acceptable dilution limits; on that basis we set metrics that really move the needle.
1. Clear principles and goals
We organized a workshop with shareholders to establish the plan's purpose, dilution range and time horizon.
2. Actionable KPIs
We select 3-4 metrics (e.g., EBITDA, ARR, churn) that can be audited monthly and link reward to actual value.
3. Market Benchmark
We analyze comparables in your industry and stage. The pool standard serves as a starting point, but we adjust it to your case.
4. Instrument selection
We compared traditional options, phantom shares and RSUs to choose the most fiscally and regulatory efficient mechanism.
5. Eligibility Map
We define who enters, when and with what percentage to avoid unrealistic expectations and subsequent litigation.
Economic modeling and value creation
We modeled the plan in multiple scenarios to prove that the divestiture yields a higher ROI than the status quo and is financially sustainable.
1. 5-year simulations
We forecast a conservative scenario. Basis and upside show the impact on valuation and dilution with sensitivity to key metrics.
2. Trade-off dilution-value
We present a clear graph of how 1 point of equity ceded can multiply the valuation by 3-5 ×, giving net upside to the partners.
3. Quantified retention
Equity programs reduce turnover by up to 45 % in two years. Here we incorporate that savings into the NPV of the plan.
4. Compatibility with box
We calibrate salary, bonus and equity so that total compensation fits within the company's annual budget.
5. Fast Iteration
We adjust assumptions in less than 48 hours to arrive at a design that all stakeholders sign off on.
Governance and clear rules
Without transparent rules the plan becomes a legal risk; we document everything to avoid surprises and protect the company.
1. Standard vesting + cliff
We propose a time average with cliff and partial acceleration in change of control. This rewards real permanence.
2. Good / Bad Leaver
We consider strict exit conditions that preserve equity in the hands of real taxpayers and recover options from terminations for cause.
3. Exercise policy
We average a post-exit window and preferential right of repurchase, to avoid passive shareholders.
4. Dividends and anti-dilution
We design explicit rules on profit sharing and adjustments if there are future rounds with aggressive discounts.
5. Compliance and communication
We work with legal templates, participant's manual and induction sessions.