Initial Public Offering (IPO)

When a company goes public, the spotlight on it becomes hot and intense. You must be fully aware of major issues that immediately come to fore in the “Three C’s”: compliance, communications and compensation.
 
  • Compliance. Get used to a new three-letter word you’ll be hearing often: SEC. The U.S. Securities and Exchange Commission requires all public companies to file numerous documents, starting with the S-1 Public Offering Filing.
  • Communications. Keeping your employees informed is critical. Equally critical is the content and style of those communications. Hold employee meetings regularly.
  • Compensation. Now that your company is publicly traded, you have a new form of employee compensation: stock options.
 

Game Plan

  • For compliance: Your newly public company must file documents including an annual report (10-k), annual proxy, 8-k filings, and Forms 3, 4 and 5. To  comply with Sarbanes-Oxley laws, you must conduct a thorough review of internal controls.
  • For communications: Keep your ear to the ground for potential morale issues, such as when your stock rises or falls, when executive compensation is made public, or when headcount actions are taken.
  • For compensation: Map out a plan to use stock options as an incentive and retention tool. Ensure that your plan conforms to your overall compensation philosophy.
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