15. Designing Compensation for Non-Public and
Foreign-Owned Companies

There are a host of intriguing executive compensation design issues
that arise when dealing with a non-public or foreign owned
company. Chief among these is the frequent lack of stock-based
compensation, or stock compensation that is offered at a signifi-
cantly reduced level as compared to the typical U.S. publicly-owned
company. In the case of foreign-owned companies, they must also
factor in cultural differences that can necessitate significant alteration
to how certain compensation and benefit programs are offered.

Family-owned businesses have their own intricacies, and often
depend on how active the family is in the business, and what the
family's goals are for the company. Pre-IPO companies are often run
with very specific financial goals, as are post-LBO companies.
The authors caution against the error of drawing generalized
conclusions across the varied types of non-public companies, and
provide separate discussion of the different types of non-public or
foreign-owned entities, detailing the interesting issues to be addressed
in each. —Editors



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