I am working with a middle market construction company that wants to examine various equity alternatives that could be used as a retention tool for 5-7 key employees. The company is currently held by two individuals who are looking to exit the business in five years. They are hoping to transfer limited ownership over the next five years and after five years either: 1. Continue with the management buyout (which would likely require the backing of private equity) 2. Seek an external buyer Once I have researched all of the alternatives I need to model what ownership transfer would look like with the vehicles selected (e.g. phantom stock versus stock options). Has anyone worked on a scenario like this? Where should I begin my research? What should this model look like (my audience is the company’s CFO)? Most of my work involves strategy consulting and I have not been tasked with modeling equity transfer structures (seems like more of a banker’s function). They have been through a formal valuation so I will use this as an input variable. It really comes down to how the company’s value is sliced and distributed and what the tax consequences are of various strucutures. I have an in-house tax expert so I will not have to research the tax implications in depth… Your input is appreciated!