M&A events can bring both excitement and uncertainty for employees. During transition time, it’s natural to think about what this means for you professionally – in terms of how your role may change – and financially – especially if you have stock-based compensation. While there’s no foolproof map to successfully navigating an acquisition, the best approach is most often to stay calm, continue delivering value, and keep your options open.
Keep Calm…
Whether you’ve worked at a company for many years or if you’ve only just settled into a new job, thinking about the many ways M&A might change your day-to-day work can be stressful. As a result, it’s easy to get distracted and consumed with the water-cooler gossip.
For most people, it can be near impossible to try to predict the outcome of M&A activity for you personally. While the thought of M&A activity tends to be associated with negative effects like layoffs, there are many times when acquisitions can be quite positive for employees. (For those with large amounts of unvested stock, the removal of golden handcuffs may come to mind). So instead of jumping to conclusions that it’s time to leave immediately, it’s often far more beneficial to take a breath and think with a level head.
…And Carry On
The key during times of transition is really to stay focused on the things you can control; namely, your contribution to the company. While it’s always important to be delivering value, demonstrating leadership and value during times of change can be particularly important.
For example, often new leadership opportunities arise during acquisitions for high performers. Those seen as productive, valued, and respected leaders can be absolutely essential to a new management team throughout the transition, and afterwards.
Additionally, there can be substantial financial upside for those who stick around. Those who remain with the combined company may be offered new equity, and if you leave before getting all the relevant information, you may miss out on possible financial upside.
Take a balanced approach
Of course, positive financial upside is never guaranteed. That’s why it’s important to keep your options open. While you’re waiting for more information about what changes are in store for you personally, it can never hurt to discretely reactivate your network.
Frankly, keeping your network active and engaged is always a worthwhile effort – even if you’re not actively looking. This is because new opportunities tend to arise at unexpected times, and when you don’t need one you have the leverage to focus selectively on those that are most attractive. This way, you’ll have some comfort that even if things don’t change in your favor at your current company, you have other options.
In the meantime, make sure you have on hand your employment agreement and any relevant equity paperwork – like a shareholder plan. These documents can contain critical information about what to expect in the event of a change of control.
Most importantly, remember that unanticipated changes in employment are something that everyone will experience during the course of their career. Ultimately, it’s important to keep your options open and make sure you’re getting a complete picture of what the changes mean for you.
And from a financial perspective, don’t be afraid to reach out to a professional who can help you understand and navigate the impact. If you have questions because your company has just been acquired, contact Paceline for a free consultation.
This blog was written by Jeremy Bohne, Principal & Founder of Paceline Wealth Management. Paceline is a fee-only investment advisor serving clients in the Boston area, and on a remote basis throughout the country. Paceline specializes in helping tech and biotech executives, physicians, and those seeking financial planning services.