Startup companies love using equity to incentivize executives and other employees. But when a company's equity isn't worth what it used to be – and particularly when stakeholders no longer expect there to be a significant upside – the company needs to find new ways to incentivize management to achieve desired outcomes. Many startups in this situation turn to liquidity bonus plans, commonly known as carve-out plans.

A carve-out plan is a type of instrument to incentivize current executives, employees, and other service providers by committing to make a payout on a change in control. This arrangement allows the executives working hard to get a struggling company to a liquidity event to share in the value they create for the shareholders.

On November 2, 2016, Marshall Mort and Taylor Cashwell from Fenwick & West LLP, along with Amy Adams, a senior legal editor with Practical Law Employee Benefits & Executive Compensation, presented Startup Company Carve-Out Plans: Mechanics, Tax Obstacles, and Optimization, discussing common business, tax, and Delaware case law constraints on carve-out plans.

Access the recorded webinar here (free registration required to view recorded webinar).

Click here to download the webinar slides.