Company Plans for U.S. IPO
Challenge: With more than 5,000 employees and 50 branches throughout China, a leading fintech company needed to keep pace with its high-growth path and potential market opportunities. To this end, it decided to raise public funds through a U.S. IPO. Most board members and current investors reside in the U.S., while the majority of the executive team members live in China. The board wanted to design the executive compensation program to support its U.S. IPO efforts and was concerned its current executive and equity compensation practices were not well aligned with best practices demanded by potential U.S. investors. The board also had concerns about blanket adaptation of the U.S. practices. This was further complicated by the fact that availability of compensation data and practices for Chinese fintech firms is limited and unreliable.
Approach: The fintech company reached out to Farient Advisors, the GECN Group’s North America team, which collaborated with our GECN Asia team to leverage their local Chinese market expertise and experience with U.S. executive compensation best practices. The GECN Group worked closely with the client’s board to understand the challenges in attracting, retaining, and motivating talent in their market. We also reviewed the limited market data for U.S.-listed Chinese companies, as well as local industry proprietary survey data. This information provided the GECN Group with insights into executive compensation programs for executive teams consisting of Chinese nationals listed in the U.S. From this vantage point, our team worked with the fintech board to translate best compensation practices in the U.S. into Chinese market realities that would work for all stakeholders.
Solution: The GECN Group’s deep understanding of both the U.S. and Chinese markets enabled the GECN to work closely with the board and management. Through this collaboration, we developed an equity grant plan that closed the gap on attracting and retaining key positions. A well-structured executive compensation program is now in place to support the fintech’s IPO and to help the company gain credibility with U.S. investors going forward.