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Article | Executive Pay Memo North America

Organizations leverage special awards for employees working on mergers and acquisitions

Results from the 2024 Acquirers’ Incentive Plan Survey

By Scott Oberstaedt , Andrew Tseng and Hannah Fowler | March 3, 2025

With global M&As on the rise, special incentives are increasingly being used to reward key employees who get the job done.
Compensation Strategy & Design|Employee Experience|Executive Compensation|Mergers and Acquisitions|Ukupne nagrade
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With global mergers and acquisitions on the rise, organizations are increasingly using special incentives to acknowledge the key employees who are getting the job done, according to WTW’s 2024 Acquirers’ Incentive Plan Survey.

Special, one-time compensation

Additional workload was the top reason global respondents cited (82%) for giving special awards to employees involved in acquisition/merger/divestiture deals.

However, many of these respondents said that these incentives are largely ad hoc and have no standardized approach to rewarding employees.

Who is receiving these awards?

Global respondents said that special compensation typically isn’t provided to top executives. Instead, most of the investment goes to those below the C-suite level.

Among employees who receive these special awards, target award-value ranges vary substantially by level.

Employees in shared services functions were most likely to be included in the special compensation plan.

Additional findings

More than half of organizations waited to communicate the special awards until after the deal closed.

Spot bonuses are the most common program used to recognize employees.

Improvement opportunities

In retrospect, survey respondents said they would have approached various aspects of special compensation differently.

  • Set clear objectives from the start against which to measure
  • Include different principles/parameters for successful vs. unsuccessful M&A
  • Better communicate any changes
  • More formal/consistent process for acquisitions
  • Reserve bonuses for larger divestitures/integration executive
  • Use a more robust framework for varying deal sizes/effort
  • Look for a dedicated/more meaningful incentive plan
  • Having a checklist/process for bringing on oversees employees
  • Align discretionary policies at senior levels
  • Ensure alignment of strategic objectives

Acknowledging the efforts of key employees involved in mergers, acquisitions and divestitures should be approached strategically to deliver the highest return on investment possible. Ensure your organization has a clear understanding of the best special compensation awards for any deal it approaches.

Authors


Senior Director, Executive Compensation and Board Advisory (Arlington)
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Associate, Executive Compensation and Board Advisory
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Analyst, Work and Rewards
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