"Recognize that Human Capital is a deal within the deal and plan accordingly. Deal teams sometimes overlook that they need to project out and calendar the key inflection points for successfully closing on the Human Capital part of the deal—just like they would for the M&A work-stream. Understanding that Human Capital requires its own closing just like the other critical work-streams is the key process insight to ensure that the right tone is set from the beginning."
– Ben Orlanski, Partner, Mergers & Acquisitions
"Start with a 30,000 foot view and work your way down. First,
focus on the structure and business strategy surrounding the
transaction. Is it a merger of equals, carve-out deal, asset deal,
joint venture, etc.? Which employees and job functions are critical
to the business strategy? This will help identify key HR-related
goals. Once you understand the structure, you can narrow the focus
on details regarding the compensation arrangements, what will be
triggered as a result of the transaction, and how to best
incentivize and retain the team going forward."
– Andrea Rattner, Partner, Employee Benefits & Executive Compensation
"One of the most important aspects in M&A is effective
communication with employees. It's critical to maintain brand
loyalty and high morale during a transaction and keeping those most
affected informed of any impact on them. The go-forward strategy is
the best way to do that. Answer the questions you can, follow up
when you say you will, and be transparent. This will help you
retain the talent that is most valuable to the organization
post-transaction."
– David Teigman, Partner, Employee Benefits & Executive Compensation
Where there are employee owners, decide how to account for their
tax goals and expectations for the transaction. Employees are a
very important constituency in a deal, no matter how much of a
company they own. An M&A transaction may be both an entirely
new and unfamiliar experience and yet of significant, even
potentially life-changing, personal importance to an employee.
Addressing taxes with personnel requires tact and, at times,
adaptability. Knowing ahead of time that a certain tax outcome may
be counterintuitive is helpful as well.
– Malcolm Hochenberg, Partner, Tax
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.