Magazine article Management Today

Ipo Dream Is Over

Magazine article Management Today

Ipo Dream Is Over

Article excerpt

DILEMMA: Market turbulence has killed the prospect of our IPO. Although this isn't a death knell for the business, it is causing a lot of trouble over our incentive schemes. What should we do: re-base the option schemes, switch rewards back to mostly income or just wait for the market to get better?

ISSUES: You're not alone. Companies large and small, public and private, face this issue. Recruitment, motivation and retention are easier if your stock is steadily rising or if there is the prospect of a big capital gain through an IPo. Presumably, your main concern is that you may lose your best people. If you've motivated them solely with money, you might.

The first thing to get clear is the position of the business. Pulling the IPO usually means you won't have the capital you thought you would. If you've been building up overheads in anticipation then it's time for a serious review of your company's cashflow and business model. You may need to raise additional capital or shed staff.

Figuring out your relative attractiveness as an employer is important. Think about the non-financial stuff first. Is the work interesting and fun, and is there a happy environment? …

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