Annual meetings are a wonderful chance to greet shareholders and drum up excitement, but their most practical use is as a place to hold important votes, allowing shareholders to determine a company’s direction and elect its board. Every leadership team hopes their shareholders will come in droves to fill the meeting space and cast their votes in person and en masse. Certainly we’ve provided some advice as to how companies can attract big crowds to their get-togethers, but sometimes even the most enthusiastic investors just can’t make the trip.
Profits interests, a relatively new form of equity compensation specific to limited liability companies, provide a share of future “profit” in the company and are used as an incentive to attract, retain, and reward employees.
Their use has increased with the growth in and benefits of limited liability companies as an alternative to traditional C or S corporations.