His Job Is Helping Make Sure Corporate Executives Get Paid
(Bloomberg) -- Sports stars have agents batting on their behalf. Company executives have Michael Sirkin.
Sirkin is a rarity among corporate America’s army of lawyers: His specialty is making sure its top leaders get paid. For the past four decades, he’s been a go-to agent for chief executive officers at some of the world’s largest companies, helping them score lucrative contracts.
Since retiring from law firm Proskauer in 2019, his focus has narrowed to executives at companies bought by private equity firms.
Sirkin is the U.S. chairman of Jamieson Corporate Finance, a London-based advisory shop that specializes in representing management teams of companies undergoing a sale to buyout firms. Sirkin has negotiated on behalf of bosses at businesses including retailer Albertsons Cos., education company Penn Foster Inc. and Tropical Smoothie Cafe.
“We’re trying to smooth the deal process and have a fair allocation of the sharing of the wealth of the growth of the company,” said Sirkin, 74, who charges up to $300,000 for his services. The buyout firm typically picks up the tab.
Jamieson is part of a cottage industry of specialized pay advisers that has mushroomed in recent decades. Executive pay packages during that time have gotten both larger and increasingly complex, often obscuring just how much the person in the corner office makes in a given year.
Critics say this has helped exacerbate the country’s yawning income inequality, ballooning the earnings gap between workers and CEOs to roughly 300:1, up from 20:1 five decades ago.
At private equity portfolio companies, the gap can be even bigger. A handful of top executives usually receive profit sharing or equity awards engineered to surge in value if the company hits growth targets. Other employees rarely get such rewards.
Sirkin said his role is simply making sure bosses and owners are on the same page.
U.S. vs. Europe
When a private equity firm buys a portfolio company in Europe, the top executives will often hire someone like Jamieson to negotiate their compensation contracts with the new owner. In the U.S., the portfolio company’s CEO traditionally negotiates pay directly, without hiring an independent adviser.
As a result, they often end up short-changed, Sirkin said. Most don’t know the intricacies of executive compensation, which awards result in the lowest tax bill or how to predict whether their payouts will actually be within reach.
And few realize they probably should ask for help -- or even that there’s help available. Big law firms usually won’t take on that kind of work due to potential conflicts of interest. And most compensation-consulting firms focus on recurring business like advising boards, not one-off deals.
“The biggest issue is that CEOs say: ‘We never knew a service like you existed,’” said Sirkin, who’s based in New York.
Jamieson was founded in 2005 by Ian Jamieson, a former Deloitte executive who said in an interview that he started the firm after seeing lots of management teams “getting jammed into deals” between private equity companies.
In 2019, Sirkin helped Albertsons CEO Vivek Sankaran secure a $28.9 million pay package that rises and falls in line with the company’s share price and adjusted earnings.
Frank Britt, CEO of Penn Foster, has led numerous companies through sales from one private equity owner to another. In 2020, facing another sale, he searched the internet for someone who could advise him and his team, and found Jamieson.
He said the firm’s services saved him from having awkward conversations with his new bosses about equity awards.
“It allows me to preserve my relationship with the new owners, because I’m not having an Israel-Palestine debate with these guys” over profit-sharing awards, Britt, 54, said.
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