Subject:
Independent Study Proposal (ILR 7990)
I’m writing to provide information regarding my MILR independent study proposal for the Spring 2022 semester.
Assistant Professor Paul Davis will be my supervising faculty for this project. The information below will help you
understand my motivation in diving deeper in the topic of financialization and its compensation implications.
Working Title of Study
Compensation Implications and Structure Changes as Startups Grow Up
Statement of Study
With the IPO and SPAC boom the past two years, I want to understand how compensation practitioners prepare for
an IPO or SPAC and how compensation practices and structures need to change to align to the changes of the
business.
Research Questions
How does a startup’s compensation philosophy and structure change as it raises capital and becomes a public
company via an IPO or SPAC? What are the processes and due diligence? Who are the key players and decision
makers involved? What are the variables and factors startups evaluate to make changes to their compensation’s
philosophy and structure? What kind of employee evaluations are considered to retain employee during this change?
Explanation of Research Questions and Research Methodology
With the growing IPO and SPAC market, it is essential for HR professionals to understand these business
transactions, what are the HR needs and involvements, and how HR needs to have a seat at the table for discussions
from the very beginning. Specifically, compensation professionals need to be a part of the conversation to
effectively evaluate, manage, and reiterate compensation philosophy and programs to adhere to the company’s
changes to stay market competitive.
To answer my research questions, I will be conducting a literature review and interviewing compensation
practitioners on their experiences managing compensation before, during and after these transactions.
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Literature Review I will be reading articles and reports from multiple sources.
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Published academic articles on this topic;
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Published articles on IPO and SPAC processes and trends from consulting firms, such as Deloitte;
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Published articles on IPO and SPAC processes and trends from laws firms, such as Cooley and
Goodwin;
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Published articles on IPO and SPACs and its HR and compensation implications from
compensation consulting firms like Aon Radford, Compensia, FW Cook, Pearl Meyers, and
Meridian.
Interviews I will be identifying and reaching out to compensation professionals who have worked or are
currently working with companies that filed for an IPO or SPAC from 2020 and onwards. I hope to understand
what was done before, during, and after the transactions—and its outcomes. In the 30-minute interview—or
longer, if opportunity permits—I will be asking a few questions. Questions are subjected to change based on
the conversation.
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Background: Can you give me an overview of your compensation philosophy and programs
before the IPO or SPAC transaction?
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Timing: When were you looped into IPO/SPAC discussions? Would you say you had enough time
to manage the changes effectively?
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Evaluation of changes: What needed to be reviewed: equity plans, executive compensation
programs, incentive programs? How did you determine what needed to change based on the
changes of the business? What were the compensation elements that needed to be reviewed and
how did you prioritize them?
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Changes: What were the compensation changes that the company move forward with? Did the
change happen before, during, or after the transaction? How did you go about with your analysis?
What factors and variables were top of mine for you when making these recommendations?
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Approval: Who were involved in advising and/or approving your recommendation(s)? In what
capacity (or how closely) did you have to work with the Founders, the Executive team, the HR
leadership team, Finance team, Legal team, and/or Compensation Committee members?
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Employee Outcomes: How did you communicate to employees concerning these changes? What
were the reactions?
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Employee Retention: What steps were taken to evaluate employee’s compensation and determine
key talent during this process? What was done to retain key talent—were compensation changes
made before or after transaction is complete?
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Reflection: Would you have done anything differently (if you had more budget, more information,
had been involved in the process earlier)?
Specific Deliverables
I will be writing a 15-page paper on my study. The paper hopes to identify and include the following information:
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My motivation and interest in conducting this study;
An overview of researched trends of IPOs and SPACs, due diligence activities, and their HR implications;
Patterns and trends of compensation implications and any structure changes during and after IPOs or
SPACs;
My recommendations to ensure a firm’s compensation strategy aligns with the firm’s unique stage of
development and its changes.
Articles, Books, and Sources for Research Project
I will be using multiple sources to supplement my learning in this project. Please see a few of the reading materials
below.
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Academic Articles
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HRM in entrepreneurial firms: A systematic review and research agenda (Lancker, et al, 2021)
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Employee Compensation in Entrepreneurial Companies (Bengtsson and Hand, 2013)
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Leaving a Legacy: Position Imprints and Successor Turnover in Young Firms (Burton &
Beckman, 2007)
Reports and Articles on IPOs and SPACs from consulting and legal firms
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Roadmap Initial Public Offerings (Deloitte, 2021)
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https://dart.deloitte.com/USDART/pdf/e316fec1-b29b-11e8-93d3-f398aa9dc17b
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Strategies for going public (Deloitte, 2020)
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Accounting and SEC Reporting Considerations for SPAC Transactions (Gillespie, et al, Deloitte,
2021)
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Private-Company CFO Considerations for SPAC Transactions (Gillespie, et al, Deloitte, 2020)
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How to plan for the first days as a public company after a SPAC merger (Malmberg, Deloitte,
2021)
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Equity Compensation Considerations Pre-and Post-IPO (Orrick, Herrington & Sutcliffe LLP)
Reports and Articles on Compensation Trends during IPOs and SPACs
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Compensation and Benefits for Startup Companies (Tibbetts & Donovan, Harvard Business
Review, 1989);
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Going Public: Key compensation issues in preparing for an IPO or SPAC merge (Szabo &
Kzirian, Meridian Compensation Partners, 2021);
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IPOs and Executive Pay (Kzirian & Harvey, Ethical Boardroom, 2018);
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Private Companies Redesign Their Employee Equity Plans as IPOs Near (Holm & Hoffman, Aon
Hewitt Radford, 2015)
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Ready, Set, IPO: A Three-Part Plan for Executive Compensation (Newth & James, Pearl Meyer,
2020)
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A Practice Guide to Compensation Committee Service: Lessons from the Field (Hosken et al,
Compensation Advisory Partners, 2007)
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Pre-IPO Pay Practices in the Current Economic Environment (Compensia, 2009)
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Preparing for an IPO – Compensation Your New Directors (Compensia, 2014)
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Equity Practices at Technology Companies with Multi-Class Stock Structures (Compensia, 2020)
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IPO: To, through, and beyond – a roadmap for equity professionals (Fidelity Investment & Aon
Hewitt Radford, 2021)
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