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An Exit/Entrance Plan for Leadership Transition (Exit Planning)

leadership transition


The founder and equal partner of a top Midwestern PR firm was planning his well-deserved retirement after 40 years in the business and felt confident he was leaving the agency in the good hands of his very capable partner and staff through a leadership transition. His partner, however, who managed the creative side of the business, was concerned about losing the expertise, business savvy and contacts of the senior partner, who was responsible for the lion’s share of new business and also functioned as the CFO of the agency.

The TobinLeff Solution

The challenge for TobinLeff was two-fold. First we had to develop a buyout strategy that would pay the departing owner what he was entitled to for his equity stake and was fundable from future cash flow, and then we had to put together an executive comp package, with equity options, to recruit a new CEO who would replace the departing owner. After placing values on the various aspects of the transactions (firm value, share value and the comp package), we developed financial models illustrating the various phases of the plan, presented our recommendations to all parties, negotiated the terms, and coordinated the drafting of the legal documents that memorialized the buyout of the owner and the compensation plan for the new CEO. The founder is now receiving payments in his retirement, and the business continues to prosper under the reins of the remaining partner and the new CEO.

Get in contact with the TobinLeff team today to learn if a leadership transition is the best exit strategy for your business.