Partnering with Management
We seek to partner with management on the basis of mutual respect, direct and open communications and uninhibited information flows. We work together with management teams to establish short and long-term performance plans that are clear, achievable and against which success can be readily measured and rewarded. We strongly believe that the management team should feel that they are working for themselves and be motivated by equity ownership in their businesses. We take great care in structuring performance-based equity and stock option programs that result in meaningful equity positions for the successful management of these companies. In addition, we structure generous annual incentive bonus plans for the management team that allow them to realize a portion of the incremental value that they create for shareholders. We also provide for and encourage management to make direct equity investments that are pari pasu to our own.
We look to develop this management partnership beginning with our first interaction with the team, and pursue rigorously those transactions in which we believe that we can become a value-added partner by complementing the management team’s capabilities. As our investment is premised on an attainable growth/operating plan that has been developed by management, we work closely with management in each of the critical structuring aspects of a transaction to ensure that the intended post-transaction capitalization structure (leverage) will not inhibit the execution of their plan. Once the investment has been made, we expect to continue building on the foundation of honest, open and straight-forward communication with our management partners in order to minimize the potential for downside surprises – for all participants.