Margarita Egiazarova on Top Management Incentives in IPOs, M&A and Business Scaling for Vedomosti

The business publication Vedomosti has published an authored article by Margarita Egiazarova, “Rewarding Strategy: How to Motivate Executives through IPOs, M&A and Business Expansion”, which examines how to build effective executive reward systems which align with a company’s strategic goals and stages of development.

In her article, Margarita Egiazarova, Partner and Head of ALRUD’s Labour Law Practice, PhD in Law, examines the specifics of developing incentive programmes for executives during periods of large-scale corporate change: preparing for an IPO, M&A deals, entry into new markets and regional expansion.

The expert points out that there is no one-size-fits-all reward system for executives: remuneration must correspond to the business agenda and the results expected over a three-to-five-year horizon. The article analyses the advantages and limitations of cash bonuses, equity participation and phantom programmes, as well as the conditions for their application at different stages of company development.

Margarita pays special attention to executive incentives in the context of IPOs and M&A deals. In particular, she explains why, before entering the public market, it is important to consider not only the current financial performance but also the company’s long-term capitalisation, and, when integrating an acquired business, to separate remuneration for closing the deal from that for results after it.

The article also examines approaches to executive incentives when scaling a business. Margarita emphasises that rewarding executives solely for revenue growth is not enough: the reward system must also take into account profitability, cash flow, the payback of new business lines and the stability of the company’s development.

According to the expert, the reward system should follow the business strategy and evolve as its objectives change. Only then will the incentive programme encourage executives to achieve the very results that create long-term value for the company.

The full text of the article “Rewarding Strategy” is available in Vedomosti at the link.