INDEPENDENT EXECUTIVE & BOARD COMPENSATION ADVISORY
Big-firm experience and rigor without the big firm.
Our clients are the boards of small-cap and pre-IPO companies. They face many of the same problems as the Fortune 500 — but their margin for error is smaller. Cash is tight, and both the upside and the risk are greater. Equity is the principal compensation element, but the company does not control the stock market. Priorities change fast, staff is lean, and simplicity has real value.
This is the context of our work, and it is why boards of emerging companies choose us. One senior practitioner with big-firm experience, producing practical recommendations supported by data — nothing delegated, nothing generic. Like our clients, we are open to change and quick to adopt new approaches that work.
Small-cap public and pre-IPO boards | One senior practitioner with thirty years of experience | All-inclusive fixed fee | Nothing sold to management
THE PROBLEM & THE OPPORTUNITY
Regardless of company size, your compensation committee carries the same duties.
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​​Being a smaller reporting company reduces what you have to disclose. It does not reduce your directors’ fiduciary duty, nor does it preclude the opportunity for the compensation committee to offer a dispassionate perspective and data to inform management’s pay recommendations.
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Addressing problems can create opportunities
A fresh look from the compensation committee creates the opportunity to drive a compensation program that motivates the executive team in the desired direction, with appropriate retention incentives. Success means compensation aligns with shareholder expectations, and large payouts are welcomed because they track real value created.
Equity does most of the compensation work
Cash is constrained, so equity carries retention, recruiting and reward at once — out of a pool that shareholders expect to last.
Dilution with an audience
An equity pool request is more likely to win shareholder approval — and sometimes a favorable recommendation from proxy advisers — when it is supported by a competitive analysis of overhang and run rate and justified against market practice.
Cap tables that don’t fit the template
Concentrated founder or controlled ownership, pre-funded warrants, caps on ownership, US executives at a foreign private issuer, reverse share splits. The standard survey cut does not describe any of it.
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Goals that move
Metrics set in January can stop describing the business by June. Designing incentives that survive a change in strategy is a different exercise from benchmarking against a peer set.
A share price that overwhelms the design
Options that were competitive at issue can be perceived as worthless after a decline in share price; grants sized to deliver competitive compensation can cause excessive dilution at a low market capitalization.
Simplicity has value
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Management staff is thin. Multiple equity vehicles, numerous metrics and adjustments, and complex quarterly valuations may make for a finely tuned compensation program on paper, but can blur focus and take executive time to build and run.
Our approach
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One client with a shared view.
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We work for the board and compensation committee, but we believe the ideal way to use a compensation adviser is for the board and management to make decisions from the same set of data and analysis. Your compensation committee gets what its oversight function requires: a defensible peer group, competitive positioning for every executive role, and a record showing the decision was informed.
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Management gets that same foundation to build the pay program it designs and recommends — so the committee and the executive team are working from one set of numbers rather than arguing about two. What management does not get is a separate channel. Everything we produce goes to the committee first, and reaches management through the committee.
WHO WE WORK WITH
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The common thread is the constraint, not the industry.
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Most of our work has been in clinical-stage life sciences and technology, but the practice is not defined by industry — our clients also include e-commerce, SaaS, renewables and insurance companies. What they have in common is not the sector - it is the constraints: stock price volatility, atypical cap tables and ownership models, priorities that change faster than annual metrics can track, and lean management staff. Our value is in the approaches we bring to those issues, regardless of the industry that faces them.