Analysis of mechanisms and instruments
Analysis of the structuring of the schemes, the instruments used, and the associated terms.
Management Packages
Support throughout the structuring of the management package as well as its valuation and any related disputes. Intervention in transactional, accounting, tax, and litigation contexts.
When is a management package valuation necessary?
Management package valuation involves valuing incentive schemes based on financial instruments (preference shares, warrants, options, etc.) and contractual mechanisms.
It is required in particular when structuring these mechanisms, as part of their negotiation, their accounting treatment, and to determine the amount of tax due and limit tax risk. During a tax audit, justifying the values used is often central.
METHODOLOGY
The valuation is based on modelling the potential cash flows accruing to the securities in which managers invest, taking into account their sometimes complex financial and contractual characteristics. The valuation relies on dedicated valuation methods, our team having developed specific expertise, in particular based on experience gained during tax audits and disputes.
Financial modelling
Valuation using appropriate models, in particular Black-Scholes, recombining trees, or Monte-Carlo simulations.
Analysis of parameters and constraints
Consideration of key parameters and constraints related to the financial structures and allocation mechanisms.
Admissible report
Formalisation of the assumptions, methods, and results in a structured report.
Management packages are based on optional instruments such as stock options, BSPCEs, warrants, preference shares, or carried interest mechanisms.
Using financial models (Black-Scholes, recombining trees, Monte-Carlo) to simulate payout profiles based on the company’s value and the terms of the instruments.
Volatility, exit conditions, allocation mechanisms (LBO waterfall), the risk-free rate, the repo margin, as well as other contractual characteristics of the instruments.
To obtain a documented analysis, carried out by specialised experts with extensive experience in this field, in particular in the context of tax audits, and that can be relied upon against a third party.
WHAT WE OFFER
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Rigorous financial modelling
Use of models suited to the securities being valued, incorporating their contractual and financial characteristics.
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Independence of the analysis
Objective assessment of the mechanisms and their economic effects for the different parties.
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Credibility of results
Documented work that facilitates discussions between investors, management, advisors, and third parties such as tax authorities.
