IPO Readiness: Compensation Committee and Governance Planning Checklist
Introduction
Through early June, this year’s initial public offering (“IPO”) activity is on pace to surpass the 374 total IPOs reported by the Securities and Exchange Commission (“SEC”) in 2025. This would mark the third year of an increase in the number of IPOs since 2022’s sharp decline from 2021’s record high.
The transition from a private to public company requires significant effort across many functions within a company, often involving six months or more of focused preparation. The checklist below summarizes the key compensation and governance-related areas board of directors, compensation committees, and management should review, discuss, and/or approve prior to a public offering.
Conclusion
While there are several executive compensation and governance-related tasks for the full board and compensation committee to consider leading up to an IPO, careful planning and ongoing collaboration with management and strong and knowledgeable compensation and legal advisors can result in successful navigation of the process over the course of three to six months before the final prospectus filing date and post-IPO. Our experience is that an incremental, phased approach to IPO readiness can ease the burden of what might feel like a full-blown compensation program overhaul and can position the company for success with respect to its executive compensation program design and governance.
_________________
