02 Nov 2026
PE firms turn to management incentives to drive growth and unlock exit value
06 Nov 2026
06 Nov 2026
This is a link-enhanced version of the article that first appeared in Mint
Article Overview:
The article examines how private equity (PE) firms are increasingly adopting structured Management Incentive Programmes (MIPs) and exit-linked incentive plans to align the interests of senior management teams with investor objectives. As PE firms pursue larger control deals and platform-building strategies, these incentive mechanisms are being used to attract, retain and motivate top leadership talent, while driving operational growth and value creation across portfolio companies. The story also explores the governance, tax and regulatory considerations associated with such arrangements.
Our Partner, Abhishek Guha, shared his perspective. Here’s what he had to say:
“Such exit-linked management incentive plans, or upside payment agreements that tie management payouts to the Internal Rate of Return (IRR) or Multiple on Invested Capital (MoIC) realised at exit, are becoming increasingly common as financial sponsors pursue more control and buyout deals in India.”
“These incentive mechanisms ensure that the management team stays motivated as they get to participate in the wealth creation when a financial sponsor achieves its preferred return benchmark.”
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