Executive Benefit Planning for Privately Held Businesses 101

Key Insights from Compensation Conversations with EBS: Part 3

As a complement to the deeper dive into the nonprofit space taken in the second installment and harkening back to the fundamentals laid out in the first webinar of the four-part series, the third Compensation Conversation with EBS turned to the planning needs of privately held businesses.

Hosted again by Christopher W. Rich, Managing Director of EBS-Boston, the conversation included both Chris Rich, Managing Director of EBS-Boston, and two external speakers, Peapack Private Investment Banking’s Eric H. Waser, CEO of PGB Securities LLC and Head of Investment Banking, and Matthew Luczyk, Senior Vice President and Head of Corporate Advisory.

This wide-ranging discussion centered around two key planning areas for privately held businesses: the attraction, retention, and appropriate compensation of key talent and planning for a possible transition of ownership and control of the business. Find additional highlights below, then be sure to watch the recording!

Battle for Talent

For Key Employees and Professionals

  • Creating a performance-based culture with significant retention characteristics through the alignment of interests with shareholders

Focus on Total Rewards – The 3 Ms:

  • Money: Design and coordination of a total rewards package:
    • Salary / STIP / LTIP / Executive Benefits
    • Alignment of incentives with strategic and financial goals
  • Mix: Allocation and establishment of relative value of the components:
    • % Fixed vs. % Variable / % Short-Term vs. % Long-Term
    • For example: Fixed compensation at the 50th percentile, total potential compensation at the 90th percentile
  • Message:
    • We want to be the employer of choice in the industry with a pay package that is clearly differentiated from our competitors.
    • You are an essential part of the Leadership Team, and you should share in the future growth and appreciation of the Company.

Preparing for Potential Transitions of Power

Starting point:

  • What is my business value and at what rate is that value increasing or decreasing?
  • Why and how is my business relevant?
  • What level of financial flexibility do I have?
  • What incremental senior debt capacity do I have? Have I reviewed with my bank?


  • Industry consolidation – scale and cutting edge systems and technology critical.
  • Bank lending tightening – less availability, tighter covenants and increased pricing.
  • Liquidity is like oxygen. First question – access to capital. Second question – cost of capital.

Strategic Alternatives:

  • Range of potential steps to take, including:
    • External Sale of 100%
    • Sale to Private Equity Firm
    • Equity Rollover + Outside Equity Investor
    • Sale to Employees (ESOP)
    • Corporate Development (Buy Side)
    • Sale of Minority Stake
    • Special Dividend / Recapitalization
    • Staying the Course
  • Peapack has built a matrix that details each option across key aspects, including:
    • Preservation of Independence
    • Valuation
    • Liquidity
    • Shareholder Risk

Final Thoughts

In closing with a closer look at the state of the middle market, with a particular focus on capital formation and mergers and acquisitions, the Peapack speakers underscored the key takeaway begun with the EBS team’s discussion: when it comes to corporate preparedness, the time to act is always now.

Ultimately, whether our shared guidance and experience validate the course already taken or lead to critical changes and redirection, EBS is poised to evaluate your unique situation to position your firm for today’s challenges and tomorrow’s possibilities.

Be sure to watch the recording now and reach out by clicking the button below to partner with EBS.

About EBS

EBS principals and Managing Directors each have over 25 years of experience working with a wide range of clients including publicly-traded companies, privately-held businesses, professional firms and non-profit organizations

Exclusive Focus

EBS is not involved in any other business. It is exclusively focused on the executive benefit market.


EBS works with clients around the country. Its technical support team is located in Boston, and the Client Service Center is located in Dallas.


EBS works with a wide range of clients including; publicly-traded companies, privately-held business, financial institutions, professional firms and non-profit organizations.


Our consultative approach is what distinguishes EBS from its competitors. We work collaboratively with clients to help them better attract, retain and appropriately compensate key employees and professionals.


The EBS planning process is consultative in nature. We work with the client to ensure that we have a complete understanding of the facts, the plan sponsor’s objectives, the needs of participants, and any specific design restrictions.

The plan design process is supported by extensive financial modeling with respect to the potential benefits for participants and cost to the sponsor.

We assist with each step of the implementation process and provide long-term plan administration and technical support.