Negotiating sale economics with CEO?
Hey all--I’m a VP in finance at a PE-backed company with a few hundred million in revenue, running a sale process for a deal in the low single-digit billions. I’ve been here 2-3 years, promoted from director. The process has been a cluster: our CFO was recently fired (the CAO was promoted to CFO), the finance team is stretched thin, and I’m having to work on my day job while leading the CIM prep, market study, model, and day-to-day coordination with the bankers. I'm one of the ~3 people who can truly do this work (along with the new CFO and an analyst), so I think I have some leverage.
My cash comp is in the mid-$300ks, but my equity looks like it’ll pay out only around $100k in the sale (mix of low total equity but also unfavorable vesting/acceleration dynamics). I’m uncertain I’ll stay long after the deal, so this may be my only meaningful liquidity event from my time here.
I’m considering asking for additional economics tied to this sale and would appreciate a reality check from people who’ve seen this firsthand. What would you ask for, and what would you realistically expect to get? Would you structure it as a transaction bonus, a retention bonus, additional equity that accelerates at closing, some combo of the three?
I’m also trying to figure out how to raise it with the CEO. He’s told me he really wants me to stay and essentially offered me any role at the company if I stayed following this deal, but I don’t think he realizes how little I’ll make from the sale. How do I make the case directly without sounding like I’m threatening to leave? I've gone pretty deep in a few processes the past three months and could credibly say I have other opportunities, but I don't want to lead with that.
Appreciate everyone's thoughts on this!
Early in my career (granted my comp was much less), I got transaction bonuses that were roughly the size of my salary.
Hopefully others will chime in with better data points, but at a bare minimum I would settle for ~$175K (half annual comp), while shooting for twice that. The smaller the number, the more I’d require all of it to be due on transaction closing.
assuming this is adding 10-20+ hours per week to your plate, it’s not unreasonable to ask the CEO for something when your equity is where it is.
To negotiate additional economics tied to the sale, here’s a structured approach based on insights from WSO discussions and similar scenarios:
1. What to Ask For
2. How to Frame the Ask
3. How to Approach the CEO
4. What to Expect
5. Backup Plan
By framing your request as a fair alignment of incentives and focusing on your contributions, you can make a compelling case without sounding threatening. Good luck!
Sources: Female wage gap in PE, I want to steal his CEO job NOW!, Solved, 2 successful years at the firm, 2 years of 0 bonus and minimal pay rise, Okay so I've got an offer. Now how to negotiate a higher offer?
In 2023, I worked on the PE firm side of a sale of a biz in the $1bn EV range and the folks who were 1-2 levels below C-suite each got a year's comp as transaction bonus when the deal closed. Those people put in at least 20h a week extra on top of their day job. It wasn't a difficult argument to make if you really are that valuable and are putting in so much work.
Agree with others. Easily 1x full annual comp. You may have not access to it, but it would be interesting if you knew option allocations to management team so you can ballpark what they stand to make.
Does being part of the management equity pool generally prevent a separate transaction bonus?
In LMM PE -> no, my PE firm has given some portco employees (i.e. VP of Finance and Chief of Staff) an additional transaction bonus on top of their existing equity options when we sold the portco. We thought their contributions were important and their existing management equity options did not give them enough and wanted to make them happy (we shared this with them when we were post-LOI and ~1 month from closing).
Why didn't we just give them more equity options instead? Not exactly sure, we just gave them a round $ figure (i.e. $150k additional transaction bonus at close on top of existing equity options).
Not sure of any tax implications of equity options vs. straight transaction bonus, but that's something OP should probably check too.
Eum voluptatem tempore delectus nihil eius impedit alias. Mollitia a cum ut ut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...