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Case Study 6: Equity Partner Compensation Design

Background

CGP advised an investment management firm on a compensation design for new equity partners.

Analysis

An dynamic compensation model was developed for each equity partner, which calculated the financing and payback term for each partner based on factors such as enterprise value, partnership percentage, anticipated growth and distribution rates.

CGP also conducted a benchmarking review to ensure market alignment of the total compensation package.

Outcome

Several modelling scenarios were reviewed by the client, and ultimately presented to the incoming equity partners.

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