Remuneration & Compensation Case Study

Carried Interest Plan - Private Equity Division of Large Financial Institution

Brief

Following internal discussions on the introduction of a long term incentive plan for the division, advise client on and design, implement and prepare documentation for a carried interest plan.

Solution

• using existing market knowledge, provide advice on design features, tax consequences and legal structure of a carried interest plan for the private equity division 
• prepare financial models to determine quantum of payout under the plan under various “what if” scenarios
• using MM&K’s own market based data, provide advice on relative allocation of carry points between the members of the team
• prepare detailed carried interest plan specification, including recommendations as to treatment of leavers and joiners
• prepare initial draft rules and other ancillary documentation for approval by the Head of Private Equity and the Remuneration Committee
• oversee implementation, including first awards under the plan.

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