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

leadership transition


The founder and equal partner of a top Midwestern public relations firm had started to plan for his well-deserved retirement after 40 rewarding years in the business. He felt confident that he would be leaving his agency in the good hands of his very capable partner and staff if he implemented a leadership transition plan. His partner, however, who managed the creative side of the business, had some concerns. He worried about losing the expertise, business savvy, and contacts of the senior partner, who had both been responsible for the lion’s share of new business and also functioned as the CFO of the agency.

The TobinLeff Solution

The challenge for the TobinLeff team 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 it would need to be fundable from the future cash flow. Then we had to put together an executive comp package, with different equity options, in order to recruit a new CEO who would replace the departing owner. After placing values on the various aspects of the transactions (the firm value, share value, and the comp package), we developed financial models that illustrated each phase of the plan before presenting our recommendations to all parties involved. Our team assisted with negotiations of the final deal terms and coordinated drafting the legal documents that memorialized both the buyout of the owner and the compensation plan for the incoming 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 whether a leadership transition is the best exit strategy for your business or if another exit plan is better suited for your future goals.