Pay Consultants with stock options
Hey fellow guys and girls,
i just watched Bill Ackman making his investment case into ADP (www. youtube .com/ watch?v=uwo72TilumU&index=250&list=WL). He is making the case that there is a lot of room for operational improvement and also gave some concrete examples.
Some what he is doing here is imo fairly similar to what a outside Consulting team would be doing, with the difference being that his leverage is way higher.
Are there Management Consulting Firms using a similar approach (getting paid according to the development of the stock price or even taking positions in the company)? If not, what are the reasons? Being riskaverse? Risk of the plans not being implemented right and risk of payment?
Possiple reasons why that might be in the best interest of all: Aligning intersts, Higher leverage of success, A more friendly approach (as the management is hiring you) in comparision to Bill Ackman
And of course that would be limited to public companies!
Yes. Performance based fees happen (first hand experience at MBB, would expect the same to be true for other consulting companies as well).
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