culture is one of the biggest things and when you do an M&A, you're always concerned about the culture ft, right. And so with all of this consolidation M&A activity that we're seeing, has culture taken a backseat to fnancial and geographic considerations?
Jamie Claire Kiser [10:26] No, not at all. This industry is nothing without people. The culture really is non-negotiable. The hard part is assessing culture. And that is one of the things that was made much, much more diffcult during the pandemic. Doing everything via zoom, instead of being able to get to know people or get to see an offce or get to see how things normally operate. Those casual connections that you make at an event, at a conference, at a trade show, those are really the building blocks of that culture, and not able to see it in action, I think, made it a lot more diffcult for frms in our space, which are very culture focused and relational to get comfortable proceeding. You're only talking to a couple of people at the very top of the frm, throughout most of the M&A process and cutting off even further kind of insight into how the inner workings of the company go. That is a huge risk factor and I'll say, coupling that with kind of the great resignation and huge demand for services, we've seen a resurgence in some of the retention strategies that really I haven't seen retention bonuses at the amounts that I'm seeing in transactions ever. I mean, just in the time that I've been doing this. But they went from something a seeing of retention bonus. So that's a form of consideration paid to a non-owner, non-key employee who's not getting an employment agreement. So usually, those are just reserved for owners, but former owners of the seller, making sure that they're locked in for a number of years. Now we're seeing buyers and sellers negotiate, setting aside a pool of money for either everyone else or a much bigger group of people. And the thought process is, even if they like getting them to commit to another six months or a year post-closing giving them an incentive to do that which gives the buyer the ability to say, let me prove my culture is good. Here's my down payment for the rest of your career. You know, you can trust us. And we've seen a lot of that in deal-making. And I think it's a proxy to the isolation that people may be felt during COVID and then just the risk of turnover too.
RandyWilburn [12:24] Can we call those mini golden handcuffs? Is that a thing?
Jamie Claire Kiser [12:32] Yeah, the key is more accessible.
The Zweig Letter Podcast – www.TheZweigLetter.com
Made with FlippingBook Annual report