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Orosur Mining Inc. H1 2017 Hasil: 3.7M Profit, 7.0M Cash From Operations dan New San Gregorio UG Mine dimasukkan ke dalam produksi 16 Januari 2017 02:35 Waktu Standar Timur SANTIAGO, Chile - (BUSINESS WIRE) - Orosur Mining Inc (Orosur atau Perusahaan) (TSXAIM: OMI), produsen emas, pengembang dan penjelajah yang fokus pada Amerika Selatan dengan senang hati mengumumkan hasil untuk paruh pertama tahun fiskal 2017 (H1 17) dan kuartal kedua yang berakhir pada bulan November, 2016 (Q2 17 atau Triwulan) dan update kegiatan eksplorasi dan pengembangannya di Uruguay. Tambang San Gregorio West Underground (SGW UG) memulai produksi penuh dari stadion perdananya pada tanggal 24 November 2016 Proyek selesai dengan anggaran dan sesuai jadwal setelah transisi peralatan dan staf yang aman dan efisien dari Konstruksi Arenal mencakup lebih dari 883m pengembangan horisontal dan kira-kira 663m pengeboran berlian isi dari 13 lubang bawah tanah yang terdiri dari sebagian besar zona yang akan ditambang dalam rencana tambang SGY FY17 yang ada. Tambahan 90.000 ton pada 1,4 gt Au yang sebelumnya tidak ada dalam rencana tambang diproduksi di tambang Arenal UG sebelum direncanakan Penutupan pada akhir Q2 17, menunda produksi kelas yang lebih tinggi dari Produksi SGW UG untuk Kuartal 6.852 oz, sebagaimana dipandu sebelumnya, dipengaruhi oleh transisi dari Arenal UG ke tambang SGW UG yang baru. Biaya operasi uang kuartalan adalah 914oz, sejalan Dengan harapan (Q2 16: 858oz) Pedoman untuk TA 17 tetap 800 sampai 900 oa Belanja modal pembangunan tambahan yang terkait dengan pembangunan tambang SGW UG di Uruguay res Biaya Transisi Arenal UG ke tambang SGW UG yang baru menyebabkan peningkatan pada Belanja Modal (capital expenditure / capex) menjadi 3,8 juta (Q2 16). : 0.9M) Kas yang dihasilkan dari operasi meningkat di Q2 17 menjadi 2.2M (Q2 16: 0.9M). Total saldo kas pada akhir periode 5.4M, meningkat dari Q1 17: 5.0M, dan FY 16: 4.3M Q2 17 Laba bersih setelah pajak sebesar 0.9M (Q2 16: loss of 0.9M) Harga emas rata-rata untuk kuartal tersebut adalah 1.252 Oz (Q2 16: 1.100oz) Pengeboran eksplorasi di dan sekitar area San Gregorio UG telah menghasilkan hasil yang positif, berhasil memotong mineralisasi emas di setiap lubang, yang diharapkan dapat meningkatkan ekonomi tambang secara signifikan dan meningkatkan cadangan dan sumber daya dalam jangka pendek dan menengah . Pengeboran lebih lanjut sedang berlangsung Selama H2 FY17, Perusahaan berencana untuk mempercepat eksplorasi di lokasi tambang terbuka di sekitar pabrik San Gregorio setelah menerima beberapa izin dan mengebor tujuh lubang RCDD (1.600 m) di koridor Arenal-SG untuk menguji kemunculan apa yang dapat Sebagai deposit yang relatif besar Di Kolombia, Perusahaan sedang menyelesaikan model geologi proyek proyek emas kelas Anz yang tinggi untuk menentukan potensi eksplorasi dengan bantuan Mine Development Associates (MDA) Reno, Nevada. Hasil karya ini diharapkan segera diumumkan Ignacio Salazar, CEO Orosur, mengatakan: Operasi tetap sehat dan menguntungkan, dengan 7 juta uang tunai dihasilkan pada paruh pertama tahun fiskal 2017. Transisi yang sukses ke San Gregorio UG sebagai Perusahaan Sumber utama pakan bijih ke pabrik di Uruguay, merupakan prestasi yang signifikan bagi Orosur. Tambang SGW UG berhasil memulai produksi dari stop pertamanya pada 24 November tepat waktu dan sesuai anggaran. Transisi, yang dicapai secara aman dan profesional, merupakan pencapaian teknis dan operasional yang signifikan dan saya senang dengan kemampuan teknis dan pelaksanaan yang ditunjukkan oleh tim kami. Ini dibiayai sepenuhnya dari arus kas operasional yang dibantu oleh transfer peralatan dan staf yang efisien antara kedua tambang yang berada di dalam. Secara paralel, eksplorasi yang lebih aktif dan agresif di Uruguay tampaknya memiliki kemungkinan yang baik untuk meningkatkan proyek bawah tanah San Gregorio dan memajukan proyek pit terbuka di sekitar pabrik. Di Kolombia, kami membuat kemajuan yang baik dalam penafsiran dan pemodelan geologi proyek emas Anz kelas tinggi kami dan berharap segera memperbarui pasar. Ringkasan Keuangan Operasional 1 1 Hasil didasarkan pada IFRS dan dinyatakan dalam dolar AS 2 Sebelum pergerakan modal kerja non tunai 3 Biaya tunai operasi adalah biaya total potongan royalti dan pajak modal atas aset produksi. Q2 17 Produksi dan Produksi SGW Q2 17 adalah 6.852 oz emas, dibandingkan dengan 8.172 oz di Q2 16. Penurunan ini disebabkan oleh rencana strategis yang telah diumumkan sebelumnya pada bulan Juli 2015, sebagai respons terhadap lingkungan harga emas yang lebih rendah. Selain itu, pada Triwulan ini, Perusahaan beralih dari operasi bawah tanahnya di Arenal ke tambang baru di San Gregorio, yang menghasilkan produksi kuartalan lebih rendah, seperti yang diumumkan dan dipandu sebelumnya. Perusahaan menetapkan dan memproses 90.000 ton tambahan dengan kadar 1,4 gt dari Arenal UG, yang sebelumnya tidak ada dalam rencana tambang atau cadangan. Tidak adanya pengembangan dan biaya fortifikasi tambang di Arenal pada tahap akhir memungkinkan pertambangan ekonomi bijih dengan nilai lebih rendah. Dalam jangka pendek, ini telah menunda nilai yang lebih tinggi yang sebelumnya direncanakan untuk Q2 17 ke depan, namun manajemen menganggap secara ekonomi positif bagi Perusahaan dalam jangka menengah dan panjang. Pembangunan tambang SGW UG selesai tepat waktu dan anggaran untuk memungkinkan produksi tahap pertama dimulai pada tanggal 24 November. Pembangunannya mencakup total pembangunan horisontal 883 m, serta pengeboran cerobong asap ventilasi 103 m. Pekerjaan pengembangan ventilasi dilakukan oleh kontraktor Peru, Tumi, menggunakan penggerek tebang diameter 3,1 m. Teknologi pengupas pengangkat dipilih untuk melakukan kerja poros ventilasi karena keunggulan produktivitas, kehandalan dan biaya. Selama Quarter, total 13 lubang berlian bawah tanah dibor, sebesar 663 m pengeboran infill di SGW UG. Kampanye pengeboran ini dirancang untuk memungkinkan penilaian thourough yang lebih banyak mengenai geometri dan tingkat badan mineral dalam tingkat dari 35m sampai dengan -5m, yang mulai diproduksi pada akhir Q2 17 dan terdiri dari sebagian besar produksi TA yang dijadwalkan dari Tambang SGW UG. Q2 17 Ringkasan Keuangan Rata-rata biaya operasi tunai adalah 914oz, dibandingkan dengan 858oz pada Q2 16. Seperti yang telah diumumkan, Perusahaan sebelumnya telah menganggarkan dan memperkirakan biaya unit yang lebih tinggi pada Q2 17, sebagai akibat dari pergeseran staf dan peralatan bawah tanahnya dari Operasi Arenal UG pada bulan-bulan terakhir produksi ke tambang SGW UG yang baru. Selama Triwulan, Perusahaan melakukan investasi 3.8M dalam bidang belanja modal dan 0,6 juta untuk eksplorasi dibandingkan dengan 0,9 juta dan 0,7 juta pada Q2 16. Selama Q2 17, Perusahaan meningkatkan investasinya dalam pembangunan jalan dan akses SGW UG Menyelesaikan pembangunan poros ventilasi. Selain itu, Perusahaan melanjutkan pembangunan fase 4A bendungan tailing. Sebagai hasil dari tambahan capex, AISC adalah 1.345oz dibandingkan 1.095 oz pada Q2 16. Harga emas rata-rata yang direalisasikan untuk Quarter adalah 1.252oz (Q2 16: 1.100oz). Laba sebelum pajak untuk kuartal tersebut adalah 1.0M dibandingkan dengan kerugian sebesar 0.9M di Q2 16. Laba bersih setelah pajak adalah 0.9M dibandingkan dengan kerugian sebesar 0.9M pada Q2 16. Arus kas dari operasi sebelum variasi modal kerja 2.2M dibandingkan Menjadi 0,9M di Q2 16. Arus kas YTD dari operasi sebelum variasi modal kerja adalah 7.0M dibandingkan dengan 1.1M untuk tahun sebelumnya karena kinerja operasi dan pendapatan yang lebih baik. Saldo kas pada akhir Triwulan adalah 5.4M dibandingkan dengan 4.3M pada tanggal 31 Mei 2016. Saldo hutang Perusahaan adalah sebesar 0.2M dibandingkan dengan 0.4M pada tanggal 31 Mei 2016 sehubungan dengan sewa peralatan minor. FY17 Panduan pengarahan Outlook Perusahaan memperkirakan panduan produksi untuk FY17 tetap antara 35.000 sampai 40.000 oz emas pada biaya tunai operasi antara 800 - 900oz. Seperti di masa lalu, variasi dalam produksi dan biaya unit diperkirakan akan terjadi, seperempat pada kuartal, karena rencana tambang menarik bijih dari berbagai sumber pada berbagai tingkat, tahap perkembangan dan faktor pengupasan tanah. Seperti yang telah diumumkan, Perseroan mengeluarkan biaya unit yang lebih tinggi pada Q2 17 karena transisi dari Arenal UG ke tambang SGW UG yang diperkirakan akan sedikit menurun selama sisa masa FY17 Perusahaan. Proyek Eksplorasi Underground Uruguay - Potensi Perluasan yang Signifikan dari Tambang SGW UG SGW UG merupakan kelanjutan, pada kedalaman, deposit pit terbuka San Gregorio yang bersejarah yang telah menghasilkan sekitar 536.000 oz pada tingkat rata-rata 2,12 gt. Selama TA17, Perusahaan bermaksud untuk menambah cadangan dan memperluas operasi SGW UG yang prospektif dalam tiga proyek bawah tanah tetangga. Proyek-proyek ini adalah San Gregorio East Underground, SGW UG Deep Extension dan San Gregorio Underground Central area. Dua proyek terakhir berhubungan dengan daerah yang sebelumnya tidak dipertimbangkan dalam rencana penambangan SGW UG dan merupakan peluang baru dengan potensi kuat untuk penggalian sumber daya dan cadangan jangka pendek. Kampanye pengeboran yang komprehensif dan ekstensif saat ini sedang dilakukan di San Gregorio. Selama TA17, total 9.000 pengeboran direncanakan untuk mengkonfirmasi dan meningkatkan cadangan dan memperpanjang tambang SGW UG. Sampai akhir Triwulan, sekitar 4.250m telah dibor, dengan hasil positif. Untuk melihat PDF lengkap dari rilis dengan gambar, klik di sini. San Gregorio Central (SGC) Area Mineralized Baru di Inti dari SG Sumber daya baru ditemukan di San Gregorio Central yang diharapkan memiliki dampak positif pada ekonomi proyek SGW UG. San Gregorio Central adalah kelanjutan timur dari badan bijih mineral SGW UG saat ini. Sebanyak dua belas lubang bor (2.252 m) telah dibor di daerah tersebut. Sepuluh di antaranya dari stasiun pengeboran bawah tanah (1.514 m) dan dua dari permukaan (738m). Semua lubang yang dibor sampai saat ini telah mencegat nilai yang dianggap sekarang sebagai mineralisasi ekonomi. Lima lubang terakhir (1.381 m) dibor selama Q2 17 dan penyadapan mineral mereka ditunjukkan di bawah ini. Q2 17 menyadap dari bawah tanah: Potensi untuk Delineasi Cadangan Baru Pada Kedalaman Di bawah Pengeboran SGW UG untuk perpanjangan mineral yang lebih dalam dari tubuh San Gregorio West UG saat ini sedang dalam proses. Badan bijih potensial ditentukan sementara oleh dua lubang bor historis dan saat ini, satu lubang bor yang menargetkan kedalaman 450 m sedang berlangsung. Diharapkan lubang ini akan mencegat badan mineral sekitar kedalaman 400m. Lubang 450m lainnya direncanakan pada Q3. Proyek Eksplorasi Pit Terbuka Uruguay Strategi produksi yang telah berhasil berjalan selama Perusahaan selama 4 tahun terakhir terdiri dari satu tambang bawah tanah inti yang menyediakan 50 - 70 bijih ke pabrik, yang dilengkapi dengan produksi dari satu atau beberapa lubang terbuka terdekat. Umpan bijih pit terbuka memberikan fleksibilitas operasional tambahan dan memungkinkan area bawah tanah lebih optimal dengan desain yang lebih kaku yang didorong oleh efisiensi operasional. Sebagai bagian dari strategi ini, Perusahaan mempercepat kampanye agresif untuk mengidentifikasi dan mengevaluasi cadangan baru yang dapat diterima melalui eksploitasi melalui metode penambangan terbuka, yang dapat dilacak dengan cepat dan termasuk dalam rencana produksi jangka menengahnya. Untuk melihat PDF lengkap dari rilis dengan gambar, klik di sini. Saat ini, area Per telah menetapkan cadangan sebesar 5.389 oz (65.010 ton 2.58 gt Au). Eksplorasi sampai saat ini termasuk pengeboran 110 lubang bor sirkulasi balik (RC) sebesar 8.974 m pengeboran, dimana 64 lubang dicegat mineralisasi. Sebagai bagian dari strategi berkelanjutan untuk menilai kelayakan teknis dan ekonomi mineralisasi ini secara lebih baik, empat lubang berlian tambahan sebesar 313m dibor selama Triwulan yang menghasilkan penyadapan berikut: Langkah selanjutnya dalam kampanye tersebut meliputi pengeboran 120 lubang pantera dangkal (shallow pantera hole) 1.800 m) selama sisa tahun fiskal berjalan. Lubang terbuka Veta Rey telah menghasilkan sekitar 18k oz selama dua tahun terakhir. Selama Triwulan, eksplorasi terus berlanjut menuju ujung selatan lubang Veta Rey saat ini, di mana indikasi kuat kelanjutan dari tubuh termineralisasi ada. Perpanjangan awal lubang sedang ditentukan dan beberapa tambahan 900 m, dengan total 12 lubang RC, direncanakan untuk Q3 dengan tujuan untuk mendapatkan cadangan tumbuh lebih lanjut. Los Naranjos adalah kontinuitas alam barat laut dari badan bijih Argentinita. Argentinita Zapucay adalah area pertambangan yang terletak 27 km sebelah tenggara pabrik San Gregorio dengan produksi historis sekitar 100.000 oz. Setelah persetujuan izin eksplorasi pada Q2 17 baru-baru ini, sebuah kampanye pengeboran pantera 1.500m bersama dengan 500m pengeboran RCDD direncanakan untuk menguji target yang ada selama Q3. Domain Sobresaliente Perusahaan memiliki tiga proyek di wilayah Sobresaliente (Don Tito, Las Pampas dan Mantos Verdes), sekitar 6 km sebelah utara San Gregorio. Daerah ini memiliki artisanal bersejarah, dengan emas yang terjadi pada pembuluh darah kuarsa yang berada di granit serupa dengan badan bijih yang sebelumnya ditambang di Sobresaliente, yang beroperasi pada tahun 2011 2013, menghasilkan 21.667 oz emas pada nilai rata-rata 1,04 gt Au. Izin diberikan kepada Don Tito pada Q1 dan pekerjaan eksplorasi menyelesaikan 5 lubang berlian, 7 lubang Reverse Circulation, dan 7 parit dengan hasil yang menjanjikan (diumumkan pada 12 Oktober 2016). Proyek ini berisi area anomali dengan penyadapan kelas tinggi. Meskipun kontrol struktural tetap tidak jelas, ada zona anomali emas sekitar 600 m pada pemogokan dan lebar 50m yang tetap terbuka sepanjang pemogokan dan kedalaman. Pada tanggal 11 Januari. 2017, izin diberikan pada dua proyek lainnya, Las Pampas dan Mantos Verdes. Beberapa eksplorasi dilakukan secara historis di Las Pampas dengan lubang bor di bawah cara kerja lama yang mengembalikan beberapa hasil yang menggembirakan. Sepanjang pemogokan di tenggara, Crystallex mengebor beberapa bagian dangkal juga dengan hasil yang menjanjikan. Sebuah zona luas emas anomali terbukti dan, di dalam zona tersebut, ada sejumlah persimpangan sempit kelas yang lebih tinggi. Dengan mengizinkan tersedia dalam tiga proyek, Perusahaan dapat mengoptimalkan selama H2 FY17 pekerjaan eksplorasi di distrik Sobresaliente dengan tujuan untuk menambahkan cadangan open pit jangka pendek. Eksplorasi Greenfield di Isla Cristalina OMI aktif dalam pencarian deposit yang lebih besar di Isla Cristalina, serupa dengan Arenal atau San Gregorio, masing-masing menghasilkan lebih dari 500.000 oz sampai saat ini. Saat ini Perusahaan telah mengidentifikasi dua area utama yang memiliki indikator potensi tersebut sebagai Arenal San Gregorio Corridor dan Nueva Australia. Reinterpretasi geologis saat ini di koridor San Gregorio Arenal, jika terbukti berhasil, akan membuka area seluas kurang lebih 25.000 m untuk eksplorasi baru. Perusahaan berencana untuk mengebor tujuh lubang RCDD (1.600 m) di koridor Arenal-SG selama H2 FY17 untuk menguji kemunculan deposit yang relatif besar. Nueva Australia dianggap sebagai kontinuitas pengungsi timur laut dari zona geser Utama San Gregorio di mana Arenal, San Gregorio, Santa Teresa dan deposito sejarah lainnya. Sedikit eksplorasi sistematis telah dilakukan di wilayah di mana fitur geologi menunjukkan adanya zona yang sangat prospektif. Pekerjaan penambangan historis dan anomali sampling kerak tanah dan batuan terkini menunjukkan potensi mineralisasi permukaan dekat. Izin eksplorasi di Nueva Australia diberikan pada Q2 17 dan Perusahaan saat ini tengah mempersiapkan target pengeboran selama H2 TA 17. Prioritas Perusahaan saat ini adalah dengan cepat mendapatkan izin eksplorasi untuk memulai kampanye pengeboran di proyek Veta Madre di selatan Uruguay. Perusahaan terus memajukan proyek emas kelas Anz yang tinggi. Perusahaan sedang dalam proses finalisasi model geologi untuk lebih memahami mineralisasi emas. Berdasarkan penafsiran geologi ini, sebuah target eksplorasi dan rekomendasi untuk kemajuan sedang dirumuskan dengan bantuan Mine Development Associates (MDA) Reno, Nevada. Hasil karya ini diharapkan segera diumumkan. Pernyataan Orang Berkualitas Informasi teknis terkait dengan aset terkini dari Orosur Mining dalam presentasi ini telah ditinjau oleh Miguel Fuentealba, seorang Insinyur Pertambangan yang dianggap sebagai Orang Berkualitas berdasarkan NI 43-101 pedoman pelaporan. Fuentealba adalah lulusan Teknik Pertambangan dari Universitas Santiago de Chile dan merupakan Anggota AusIMM dan Pihak Berkualitas dari Komisi Pertambangan Chili. Bapak Fuentealba memiliki 20 tahun pengalaman profesional di bidang teknik pertambangan, pengembangan dan pengelolaan tambang. Pernyataan Terang Kehadiran Semua pernyataan, selain pernyataan fakta historis, yang terdapat atau digabungkan oleh referensi dalam siaran pers ini, termasuk informasi mengenai kinerja keuangan atau operasi masa depan Perusahaan, merupakan pernyataan berwawasan ke depan dalam arti undang-undang sekuritas tertentu. , Termasuk ketentuan pelabuhan aman dari Securities Act (Ontario) dan Undang-Undang Reformasi Litigasi Sekuritas Swasta Amerika Serikat tahun 1995 dan didasarkan pada perkiraan perkiraan dan proyeksi pada tanggal rilis berita ini. Tidak ada jaminan bahwa pernyataan semacam itu akan terbukti akurat. Pernyataan tersebut tunduk pada risiko dan ketidakpastian yang signifikan, dan hasil aktual dan kejadian di masa mendatang dapat berbeda secara material dari yang diantisipasi dalam laporan tersebut. Pernyataan berwawasan ke depan mencakup, namun tidak terbatasnya keberhasilan kegiatan eksplorasi yang memungkinkan garis waktu kegagalan peralatan atau proses pabrik beroperasi sebagai dugaan kecelakaan persyaratan perselisihan perburuhan untuk sengketa atau klaim kepemilikan modal tambahan dan pembatasan cakupan asuransi. Perusahaan menolak setiap niat atau kewajiban untuk memperbarui atau merevisi pernyataan berwawasan ke depan baik sebagai hasil dari informasi baru, kejadian masa depan dan pernyataan berwawasan ke depan, kecuali sejauh yang diminta oleh undang-undang yang berlaku. Tentang Orosur Mining Inc. Orosur Mining Inc. adalah produsen emas terintegrasi, pengembang dan penjelajah yang fokus untuk mengidentifikasi dan memajukan proyek emas di Amerika Selatan. Perusahaan mengoperasikan satu-satunya tambang emas yang memproduksi di Uruguay (San Gregorio), dan telah mengumpulkan portofolio eksplorasi aset berkualitas tinggi di Uruguay, Cile dan Kolombia. Perusahaan terdaftar di Kanada (TSX: OMI) dan London (AIM: OMI). Untuk informasi lebih lanjut, silakan kunjungi orosur.ca Orosur Mining Inc. Laporan Keuangan Bendahara Kontinu Interim Konsolidasian Ribuan Dolar Amerika Serikat, kecuali jika mengindikasikan Ketersediaan Opsi Saham dan Hak-hak Saham Lainnya Darryl Ott dan Robert Lew membahas teknik pemberian dana yang direncanakan agar lebih populer ( Dan kompleks) yang dikenal sebagai opsi saham insentif, opsi saham non-kualifikasi, dan saham terbatas dalam artikel informatif ini. Artikel tersebut mencakup sejumlah studi kasus yang menggambarkan teknik perencanaan amal yang dapat digunakan dengan aset-aset ini. Diterbitkan pada bulan April 2001 oleh Darryl Ott dan Robert Lew Darryl D. Ott dari Morgan, Miller amp Blair di Walnut Creek, California, telah terlibat dalam perencanaan transfer kekayaan untuk individu dengan kekayaan bersih tinggi selama 30 tahun, dan dengan pemberian amal yang direncanakan selama lebih dari 10 Tahun. Dia adalah mantan anggota dewan direksi dan presiden masa lalu dari Northern Northern Direncanakan Memberi Dewan, dan telah menjadi presenter untuk NCPG, dan organisasi nasional dan lokal lainnya dalam berbagai topik transfer kekayaan. Ott memiliki gelar JD dari University of California, Hastings College of the Law, San Francisco, dan merupakan Certified Specialist of Perpajakan Hukum dengan California State Bar. Robert Lew adalah pemilik Perencanaan dan Penasihat Keuangan, perusahaan yang mengkhususkan diri dalam perencanaan perumahan dan layanan asuransi yang berlokasi di San Francisco, California. Sebelum menjabat saat ini, dia bekerja selama lebih dari tujuh tahun untuk organisasi nirlaba seperti Palang Merah Amerika. Lew telah aktif dalam rencana pemberian selama lebih dari delapan tahun. Dia adalah mantan anggota dewan Northern California Direncanakan Memberi Dewan dan saat ini menjabat di dewan Komite Nasional untuk Rencana Pemberian. Tujuan dari artikel ini adalah untuk memberikan bantuan kepada perencana hadiah amal dan penasihat profesional lainnya untuk memahami peraturan pajak penghasilan yang sangat kompleks dan persyaratan hukum lainnya mengenai opsi saham insentif, opsi saham tidak memenuhi syarat, dan stok terbatas. Selain itu, penting bagi perencana hadiah amal untuk dihadapkan pada studi kasus spesifik yang menggambarkan cara mengintegrasikan hadiah terencana amal dengan alat bangunan kekayaan penting ini, dan untuk memahami bagaimana opsi dan hak saham lainnya sesuai dengan perencanaan transfer kekayaan keseluruhan untuk Pendonor potensial yang sangat penting ini. Ada satu asumsi yang mendasari seluruh pembahasan mengenai opsi saham. Anggapannya adalah bahwa pada tanggal pelaksanaan opsi tersebut, nilai pasar wajar saham perusahaan lebih besar dari harga pelaksanaan yang ditentukan dalam opsi. Meskipun mungkin ada beberapa situasi ketika penerima opsi mungkin ingin menggunakan opsi saham jika harga pelaksanaan lebih besar daripada nilai pasar wajar dari saham, hal itu sangat tidak mungkin terjadi. Semua referensi dalam artikel ini mengenai persyaratan pajak dan hukum khusus untuk opsi saham dan saham terbatas dibatasi untuk peraturan undang-undang federal. Persyaratan pajak dan hukum untuk setiap negara harus dirujuk secara khusus. Definisi 2 dan 1 Aturan. Aturan kuotil dan 1 Rulequot adalah peraturan yang hanya terkait dengan opsi saham insentif dan hanya berlaku setelah opsi saham insentif telah dilakukan, dan di mana penerima beasiswa adalah pemilik saham perusahaan. Agar karyawan penerima beasiswa dapat melaporkan keuntungan penjualan saham sebagai capital gain, dan bukan sebagai kompensasi biasa, Aturan 2 dan 1 mewajibkan karyawan penerima beasiswa untuk memiliki saham sebelum penjualan untuk Periode yang lebih lama dua tahun setelah tanggal pemberian opsi saham insentif, atau satu tahun setelah tanggal pelaksanaan opsi saham insentif. Aturan ini memiliki implikasi yang sangat penting bagi kemampuan karyawan penerima beasiswa untuk menggunakan alat pemberian yang direncanakan. Apalagi, Aturan 2 dan 1 tidak berlaku lagi setelah kematian karyawan penerima beasiswa. Pajak minimum alternatif. Perhitungan kuotasi minimum pendapatan pajak minimum (AMTI) sama sekali berbeda dan selain dari perhitungan penghasilan kena pajak untuk keperluan pajak penghasilan biasa. AMTI dihitung dengan cara yang sama dengan penghasilan kena pajak untuk tujuan pajak biasa, kecuali: 1) beberapa item pendapatan dan pengurangan yang digunakan dalam pendapatan kena pajak biasa disesuaikan dan 2) item preferensi tertentu ditambahkan kembali ke penghasilan kena pajak untuk sampai pada AMTI. Taxquot minimum kuantitatif tentatif (AMT) sama dengan 26 dari basis pajak minimum alternatif sampai dengan 175.000 dan 28 basis pajak alternatif alternatif di atas 175.000. Basis pajak minimum alternatif adalah AMTI dikurangi dengan berbagai jumlah pembebasan. AMT yang kemudian dihitung kemudian dibandingkan dengan pajak penghasilan wajib pajak biasa, dan jika AMT lebih besar, AMT adalah jumlah yang harus dibayar untuk tahun pajak tersebut. Untuk tujuan pasal ini, jumlah dimana nilai pasar wajar dari saham yang diperoleh pada saat pelaksanaan opsi saham insentif melebihi harga pelaksanaan, merupakan item preferensi pajak yang harus disertakan dalam AMTI. Dasar. Harga latihan ditambah jumlah yang direalisasikan sebagai pendapatan saat berolahraga. Opsi kompensasi kompensatorik dan kompensasi saham terbatas. Istilah quotcompensatory stock optionsquot dan quotcompensatory restricted stockquot berarti setiap opsi untuk mengakuisisi saham perusahaan yang diberikan kepada karyawan, seperti opsi saham insentif, atau kepada karyawan, direktur, dan konsultan, seperti opsi saham tidak memenuhi syarat, dan Setiap saham yang dibatasi yang dikeluarkan untuk karyawan perusahaan sebagai bentuk kompensasi. Istilah ini sangat umum. Opsi opsi kompensasi ini harus dibedakan dari opsi penawaran saham, seperti yang diperdagangkan di Chicago Board of Options Exchange, karena pengaruh pajak penghasilan dengan opsi investasi sangat berbeda dengan opsi kompensasi. Diskualifikasi disposisi. Sebuah disposisiquot quotdisqualifying adalah aplikasi sebaliknya dari Aturan 2 dan 1. Jika, setelah pelaksanaan ISO, persediaan dijual, ditukar, diberikan, atau dipindahkan dalam waktu dua tahun sejak tanggal pemberian ISO, atau dalam waktu satu tahun sejak tanggal pelaksanaan ISO, karyawan tersebut Harus melaporkan quotgainquot (selisih pada tanggal penjualan antara hasil penjualan dan harga strike) sebagai pendapatan kompensasi biasa dan bukan sebagai capital gain. Tanggal latihan Tanggal kedaluwarsa opsi ini adalah tanggal pengiriman pelaksanaan opsi. Latihan pilihan. The quercercise of optionquot umumnya merupakan pemberitahuan tertulis kepada perusahaan oleh penerima pilihan atas niatnya untuk memperoleh sejumlah saham tertentu dari perusahaan sesuai dengan pemberian opsi tersebut. Harga latihan Harga kuotret harga pasti adalah harga yang harus dibayarkan oleh penerima beasiswa kepada perusahaan pada tanggal pelaksanaan untuk mengakuisisi saham perusahaan. Harga pelaksanaan harus ditentukan dalam pemberian opsi. Sama seperti klik quotStrike strike Priceprice.quot Grant date. The quota datequot adalah tanggal dimana perusahaan memberikan (hibah) opsi untuk membeli saham di perusahaan, baik sebagai opsi saham insentif atau sebagai opsi saham yang tidak memenuhi syarat, kepada penerima beasiswa. Hak penerima beasiswa untuk memperoleh saham diatur oleh persyaratan pemberian opsi. Berikan pilihan. Kuantitas opsi opsi umumnya berupa dokumen tertulis yang diberikan kepada penerima opsi yang menentukan semua persyaratan opsi seperti harga pelaksanaan, jangka waktu opsi, jadwal vesting, jumlah saham perusahaan yang Dapat diperoleh, apakah opsi tersebut dapat dipindahtangankan, jika dapat dipindahtangankan, kepada siapa pihak tersebut dapat ditransfer, dan apakah opsi tersebut dapat dilakukan oleh penerima yang ditunjuk setelah tanggal kematian penerima hibah. Opsi saham insentif. Opsi opsi insentif (ISO) adalah opsi yang dikeluarkan sesuai dengan rencana yang diadopsi oleh perusahaan pemberi kerja yang sesuai dengan semua persyaratan wajib dari Internal Revenue Code (IRC) 421 sampai 424 bila diberikan. Juga dikenal sebagai pilihan undang-undang. IRC 83 (b) pemilihan. Kutipan quototC 83 (b) pemilihan dibuat berkenaan dengan stok terbatas, dan dalam beberapa keadaan yang sangat khusus dapat dilakukan pada saat pelaksanaan opsi saham insentif untuk mencoba membatasi pajak minimum alternatif. Pemilu, yang harus diajukan ke IRS untuk tahun pajak dimana karyawan tersebut pertama kali menerima pengalihan saham terbatas tersebut, memungkinkan karyawan tersebut untuk melaporkan jumlah pendapatan kompensasi biasa yang lebih kecil selama tahun ini setelah menerima saham tersebut, dengan Semoga di tahun-tahun depan, ketika karyawan menjual saham dengan nilai lebih tinggi, karyawan kemudian dapat melaporkan apresiasi ini sebagai capital gain income daripada sebagai pendapatan kompensasi biasa. Masa simpan minimum Jumlah waktu dimana karyawan harus memegang saham yang diterima pada saat pelaksanaan ISO untuk mendapatkan perlakuan hukum yang menguntungkan, yaitu: 1) dua tahun sejak tanggal opsi diberikan dan 2) satu tahun sejak tanggal opsi tersebut dilaksanakan. Opsi saham tidak memenuhi syarat. Opsi saham non-kualifikasi (NQSO) adalah opsi untuk mengakuisisi saham perusahaan yang tidak, karena salah satu dari sejumlah alasan, memenuhi semua persyaratan IRC untuk opsi saham insentif. Juga dikenal sebagai pilihan non-undang-undang. Pilihan. Istilah quotoptionquot seperti yang digunakan dalam artikel ini adalah hak seseorang untuk membeli, dengan harga tertentu, sejumlah saham tertentu dari perusahaan berdasarkan penawaran perusahaan yang berlanjut untuk periode waktu yang ditentukan. Stok terbatas. Saham yang dibatasi adalah saham yang memiliki batasan hukum kontrak atau sekuritas yang dikenakan pada pengalihan saham. Tanggal penjualan The quotsale datequot adalah tanggal dimana pemilik saham perusahaan (apakah sebagai akibat dari pelaksanaan opsi, atau perolehan saham terbatas) benar-benar menjual saham dan mengurangi kepemilikannya atas saham tersebut. Tanggal penjualan kadang-kadang disebut sebagai tanggal disposisi. Vesting. QuotVestingquot adalah titik waktu ketika penerima opsi (sesuai dengan persyaratan pemberian opsi) atau pemilik saham terbatas (sesuai dengan ketentuan dalam perjanjian saham terbatas) menjadi hak yang tidak dapat ditentukan untuk memperoleh (dengan sebuah Opsi) atau untuk mempertahankan kepemilikan (dengan saham terlarang) saham perusahaan. Vesting umumnya tersebar dalam periode tahun-tahun dengan persentase yang meningkat, namun tidak ada persyaratan hukum khusus mengenai seberapa cepat hak atas saham tersebut harus rampung. Opsi Saham Insentif Opsi opsi insentif (ISO) adalah opsi yang dikeluarkan sesuai dengan rencana yang diadopsi oleh perusahaan pemberi kerja yang sesuai dengan semua persyaratan undang-undang IRC 421 sampai 424 bila diberikan. Beberapa persyaratan dasarnya adalah: 1) pemegang saham harus menyetujui rencana 2) ISO harus diberikan kepada karyawan perusahaan (bukan direktur atau konsultan) dan, pada dasarnya, individu tersebut harus tetap menjadi karyawan sejak tanggal Latihan 3) harga pelaksanaan (strike) untuk saham harus sama atau melebihi nilai wajar saham perusahaan pada tanggal hibah 4) opsi harus diberikan dalam waktu 10 tahun sejak tanggal diadopsinya rencana Dan harus dilaksanakan dalam waktu 10 tahun sejak tanggal opsi diberikan 5) nilai wajar dari saham ISO yang pertama kali dieksekusi selama setahun tidak dapat melebihi 100.000 berdasarkan nilai saham perusahaan pada tanggal hibah dan 6 ) Seseorang yang sudah memiliki lebih dari 10 saham perusahaan harus membayar paling sedikit 110 dari nilai wajarnya sebagai harga pelaksanaan (strike) dan opsi tersebut harus berakhir dalam waktu lima tahun dibandingkan dengan 10 tahun untuk pemegang saham yang lebih rendah. Sesuai dengan ketentuan IRC 422, ISO tidak dapat dipindahtangankan. Karena semua persyaratan dan batasan ini, ISO sendiri (berlawanan dengan persediaan yang diperoleh dengan penerapan ISO) tidak memberikan banyak uang, jika ada, perencanaan transfer kekayaan sebelumnya, perencanaan pajak penghasilan, atau perencanaan pemberian hadiah amal. Tidak ada konsekuensi pajak penghasilan kepada penerima beasiswa-karyawan pilihan pada tanggal pemberian opsi. Umumnya, tidak ada pengaruh pajak penghasilan reguler dengan ISO pada saat pelaksanaan opsi oleh karyawan penerima beasiswa. However, the difference, as of the date of the exercise of the ISO, between the fair value of the stock, as of the date of the exercise, and the strike price for the stock is an item of preference for purposes of the alternative minimum tax (AMT) calculations. The possibility of the imposition of the AMT can create a very difficult cash management situation for the grantee-employee after the exercise of the ISO, and, therefore, after the acquisition of the stock because the donor may have AMT to pay to the IRS as a result of his or her exercise of the ISO, but may not have any cash with which to pay the AMT. An obvious solution to this cash dilemma is to sell some of the stock acquired by the exercise of the ISO at least up to an amount that creates regular tax equal to the AMT. But such sales of too much of the stock would then lead to other adverse income tax consequences. One of the other requirements of an ISO is to enable the grantee-employee of the ISO (and now owner-employee of the stock of the company) to obtain long-term capital gain treatment upon a sale of the stock known as the quot2 and 1 Rule.quot The 2 and 1 Rule will permit the owner-employee to report the gain on the sale of the stock as capital gain if, after the exercise of the ISO, the stock is not sold within two years of the date of the grant of the ISO, or not within one year of the date of the exercise. A disposition (whether a sale, exchange, gift, or other transfer of legal title) of the stock that occurs after the expiration of the 2 and 1 Rule time periods is referred to as a qualifying disposition. A disqualifying disposition is a reverse application of the 2 and 1 Rule. If, after the exercise of the ISO, the stock is sold, exchanged, given, or otherwise transferred within two years of the date of the grant of the ISO, or within one year of the date of the exercise of the ISO, the employee must report the quotgainquot (the difference, as of the sale date, between the sales proceeds and the strike price) as ordinary compensation income and not as capital gain. The difference in federal income tax rates between those for ordinary income and those for capital gains can be significant. The difference in the combined rates for federal income taxes can be as much as 19. Needless to say, if the owner-employee needs the cash to pay the AMT, or otherwise is just wanting to diversify, or simply feels that the stock has reached its peak in value, the owner-employees advisors, including gift planners, must understand and be able to explain the difference in the income tax treatment to the owner-employee. There are a few limited exceptions to the disqualified disposition rules, such as the transfer of the stock by a decedent by bequest or other form of inheritance. However, it is this 2 and 1 Rule that causes the owner-employee of the stock to report any gain as ordinary income on a transfer by gift of his or her ISO-created stock to a charitable remainder trust before the satisfaction of the 2 and 1 Rule. There are now a multitude of methods related to the exercising of an ISO that in some instances provides some income tax and cash flow assistance to the grantee-employee in the exercise of the ISO, and the ownership of the stock of the company resulting from the exercise of the ISO. These methods are generally variations that provide financing assistance to the grantee-employee. A detailed explanation or analysis of these methods is clearly beyond the scope of this article. However, some of the methods are: 1) using stock of the employer to pay for the exercise of the ISOs 2) under certain limited circumstances exchanging ISO stock for similar company stock 3) granting a quotreloadquot option when company stock is used to pay for the exercise price for the company stock then being acquired 4) providing tandem stock appreciation rights (SARs) so long as the SARs meet certain requirements and 5) providing financing through a broker for a quotcashless exercisequot of the ISOs. Following the death of the grantee-employee, if the ISO plan permits the beneficiaries of the grantee-employee to exercise the ISO, then as long as the option was an ISO as of the date of the grantee-employees death, the beneficiaries of the ISO will receive the same tax treatment on the exercise of the option as would have been realized by the grantee-employee. The transfer of the ISO to the beneficiaries, or the transfer of the stock of the employer to the beneficiaries that has not yet satisfied the 2 and 1 Rule is not a disqualifying disposition of the stock. Moreover, the estate or heir who receives the ISO does not have to comply with the 2 and 1 Rule at all with respect either to ISO stock received by the beneficiaries from the grantee-employee, or stock received by the beneficiaries following their exercise of the ISO. The death of the grantee-employee eliminates the need to comply with any of the ISO holding period requirements. However, the date of death of the grantee-employee will be the starting date for the measurement of the capital gain holding periods that will be used to determine whether any post-death appreciation is either short-term or long-term capital gain. In addition, the ISOs receive a full step up in basis just like any other asset of a decedent, and no ordinary income or capital gain will be reportable on the stepped-up basis portion on a later exercise of the ISOs or disposition of the ISO stock by the beneficiaries. Also, due to this step up in basis of the ISO, the death of the grantee-employee eliminates the occurrence of any AMT on the subsequent exercise of the ISO by the beneficiaries, at least with respect to the pre-death bargain element in the ISO. The fair market value of the ISO, as of the date of the death of the grantee-employee, is an asset that will be includable in the taxable estate of the grantee-employee. The fair market value of an ISO is basically the difference between the fair value of the stock of the company, as of the date of the death of the grantee-employee, and the strike price. Generally, the plans for the ISOs permit the recipient from the grantee-employee to exercise the ISOs in the same manner as the grantee-employee, and to receive the same income tax treatment on exercise, and on any subsequent disposition as would have applied to the grantee-employee if heshe would have lived. If the deceased grantee-employee was employed by the employer as of the date of his or her death, there is no statutory requirement that the recipient must exercise the ISO within three months of the grantee-employees death. Even though a transfer of an ISO upon the death of the grantee-employee is permitted by the statutes and is not a disqualifying disposition, and even though the recipient of the ISOs, following the death of the grantee-employee, is entitled to the special income tax reporting rules discussed above as would have been available to the grantee-employee, the recipient is also still subject to the same reporting requirements as would have applied to the grantee-owner. And, in addition, the ISOs still are not otherwise transferable by the recipient. So, the limitations on the planning possibilities for the recipient and on the transfer of the ISOs to charities still apply. Again, it is only after the exercise of the ISO, and the ownership of the underlying stock itself, that traditional gift planning possibilities will arise. In fact, the net effect of all of the post-death rules for ISOs is that the ISO stock is to be treated by gift planners no differently from any other asset in an estate of a decedent. Non-Qualified Stock Options A non-qualified stock option (NQSO) is an option to acquire a companys stock that does not, for any number of reasons, satisfy all of the IRC requirements for incentive stock options. Unlike incentive stock options, the issuance of an NQSO is not limited just to employees of the company, but they may be granted to employees, directors, and consultants to the company. Also, unlike the requirements for incentive stock options, NQSOs can be transferable at any time, either before or after exercise of the option if the plan adopting the NQSOs or the grant of the option permits the transfer. This transfer possibility does provide some additional planning opportunities for allied professionals and charitable gift planners. IRC 83 is involved in the analysis of the income tax effects of non-qualified stock options. Generally, the grantee of the NQSOs will not recognize taxable income on the date of the grant of the option. The tax reason is simply that, pursuant to the provisions of IRC 83, the option does not have a quotreadily ascertainable fair market value.quot In effect, the compensatory aspects of the option are held quotopenquot until the option is exercised. Since, at the time of the grant of the NQSO there is not a tax event, the income tax effect in the future is to treat the appreciation in the value of the property underlying the option between the date of the grant and its exercise as compensation income and not capital gain. Under these circumstances, the grantee of the NQSO would generally want to treat the value of the option, as of the date of its grant, as compensation income rather than as of the date of the exercise of the option. The reason for this preference is that the amount of ordinary compensation income that would be reportable, as of the date of the grant, would generally be less than the reportable ordinary compensation income as of the date of the exercise of the option. And, therefore, the ultimate capital gain that would be reported upon the eventual sale of the stock would be greater. However, the IRC specifically and purposefully makes it difficult, for this very reason, for the grantee of the NQSO to report any ordinary compensation income, as of the date of the grant, of the NQSO. If an NQSO is not actively traded on an established market, which is highly likely, then IRC 83 has four rigorous tests that must be met for the NQSO to have a readily ascertainable fair market value. The effect of these requirements is to force the taxation of the value of the NQSO to the date of its exercise. However, from a non-tax standpoint, an NQSO is still a very attractive compensation device for executives and employees of a company. The options are generally granted without requiring the grantee to make any payment for it as of the date of the grant the income tax effects are delayed, and the NQSOs also offer significant upside if the company quottakes offquot as is generally expected. On the date of the exercise of the NQSO, the grantee will be required to recognize ordinary compensation income in an amount equal to the excess of the fair market value of the stock, as of the date of the exercise, over the exercise (strike) price paid for the stock on such date. There are issues from the companys standpoint concerning the companys obligations to report this inclusion of income by the grantee to the government and, therefore, the obligation of the company to withhold income taxes from the grantee as of the date of the exercise of the NQSO. Unlike incentive stock options, there is not any concept of a quotqualifyingquot or quotdisqualifyingquot disposition of the stock. Following the exercise of the NQSO and the acquisition of the stock of the company and, additionally, the reporting of the ordinary compensation income at such time, the stock will be treated in the same manner as any other investment stock of the grantee-owner. The holding period for the determination of future capital gain recognition (more than 12 months) commences as of the date of the exercise of the NQSO. The basis of the stock acquired by the exercise of the NQSO is the amount paid by the grantee for the stock (the strike price) plus the amount of the ordinary compensation income reported by the grantee as of the date of the exercise. As a result, the basis of the stock is generally its full fair market value as of the date of the exercise of the NQSO. So, on a future disposition of the stock by the grantee-owner, any increase in value of the stock over its value, as of the date of the exercise of the NQSO, will be taxed as capital gain income. And, if the disposition occurs more than 12 months after the date of the exercise of the NQSO, then the appreciation will be treated as long-term capital gain, and will qualify for taxation at the lower capital gain income tax rates. Due to the fact that NQSOs can be transferred if the plan adopting the NQSOs, or the grant of the option permits the transfer, this possibility opens up some charitable and non-charitable planning opportunities. Most importantly for the planned giving community, the IRS, in private letter ruling (PLR) 200002011 (and subsequently reinforced in PLR 200012076), reached several favorable conclusions concerning a transfer by a decedent of NQSOs, to a charitable organization at the time of her death. The IRS concluded that the decedents estate would be entitled to a full charitable deduction for the fair market value of the NQSOs passing to the charity, and that when the charity exercises the NQSOs, the charity and not the estate of the decedent will be required to report the income. Also in this PLR, the IRS concluded that the transfer of the NQSOs, and the reporting of the income upon the exercise of the NQSOs, were quotincome in respect of a decedent,quot which is the same conclusion used for the disposition of qualified retirement plan accounts and individual retirement accounts. See case study 3 for a discussion of the gift planning possibilities with testamentary transfers of NQSOs. There is a different tax result, however, with lifetime, non-arms length transfers of NQSOs. In PLR 9722022, the grantee transferred NQSOs to an irrevocable trust for the benefit of family members. The IRS concluded that the transfer of the NQSOs to the trust did not cause the grantee to recognize income as of the date of the transfer and, most importantly, that upon the subsequent exercise of the NQSOs by the trust, the grantee and not the trust would recognize taxable compensation income equal to the excess of the fair market value of the shares received as of the date of the exercise (determined as of the exercise date) over the option price paid for the shares. The word quotcharityquot could be substituted for the word quottrustquot in PLR 9722022 with a similar result. And, with a further conclusion that the grantee would receive a charitable income tax deduction, as of the date of the exercise of the NQSOs, by the charity in the same amount as the amount of the taxable compensatory income to be reported by the grantee as of such date. See case study 4 for a discussion of the gift planning possibilities with lifetime transfers of NQSOs. Following the death of the grantee-employee, if the NQSO plan permits the beneficiaries of the grantee-employee to exercise the NQSO, and if the NQSO was not taxed at the date of the grant thereof, then the NQSO will pass to the beneficiaries of the grantee-employee with the potential taxation of the compensation income element left open. So, after the date of the death of the grantee-employee when the beneficiaries engage in a transaction that quotclosesquot the option transaction (an exercise of the option), it will be the beneficiaries who will report the ordinary compensation income (see Treas. Reg. 1.83-1(c) and (d)). The quotopenquot income tax treatment of this asset applies the same rules with the same income tax effects as with any other assets that involve quotincome in respect of a decedent.quot Most notably, these rules and the tax treatment are the same as those involved with qualified retirement plans and individual retirement accounts. These IRD rules provide planning opportunities for gift planners that will be discussed in more detail in case study 5. The fair market value of the NQSO, as of the date of the death of the grantee-employee, is an asset that will be includable in the taxable estate of the grantee-employee. The fair market value of an NQSO is basically the difference between the fair value of the stock of the company, as of the date of the death of the grantee, and the strike price. The possibility for testamentary planning with NQSOs is much better than with ISOs. As discussed in case studies 3, 4, and 5, there are more quotpre-exercisequot planning opportunities with NQSOs than are available for ISOs. Restricted Stock The area of quotcompensatoryquot transfers of property using restricted stock is governed by IRC 83. For purposes of this article, the term quotpropertyquot will mean stock of the employers company. When an employer quottransfersquot stock that is quotrestricted,quot and that is subject to a quotsubstantial risk of forfeiturequot to an employee quotin connection with the performance of services,quot then the analysis of the income tax effects to the employee are not too dissimilar to those discussed above with respect to incentive stock options and non-qualified stock options. Perhaps the best way to explain quotrestricted stockquot is by way of an example. On July 1, 2000, Dotcom Corporation transfers 1,000 shares of its common stock to its employee, Ms. Technonerd (Ms. T), who does not pay anything for the stock. On the date of the transfer, the shares have a value of 1.00 per share. The agreement between Dotcom and Ms. T specifies that if Ms. T leaves the employ of Dotcom before July 1, 2002, she will forfeit all rights to the stock that must then be returned to Dotcom without Ms. T receiving any payment for the stock. In addition, Ms. T is prohibited by the employers restricted stock plan from transferring the stock during the period that the quotsubstantial risk of forfeiturequot (the employment condition) continues to apply other than on her death or to a limited class of permitted transferees such as her family members and charities. A legend to this effect is stamped on Ms. Ts stock certificate. Assume that the value of the stock on July 1, 2002, which is after Dotcoms IPO, will be 50.00 per share. Assume also that Ms. T remains in the employ of Dotcom past July 1, 2002. For purposes of the following discussion, July 1, 2000, is the date of the quottransferquot of the quotpropertyquot (the stock), and July 1, 2002, is the date that the stock is transferable and no longer subject to the substantial risk of forfeiture. Contrary to the rules discussed above with respect to incentive stock options and non-qualified stock options as of the date of the grant of the options, the date of the quottransferquot of the restricted stock to the employee is significant. Depending upon what course of action the employee takes on the date of the transfer, the employee may, or may not, have an income tax reporting event as of that date. In the example set forth above, Ms. T will not have any income to report if she does nothing because the stock that she received is subject to a quotsubstantial risk of forfeiture.quot However, see below for the income tax effects to Ms. T, as of the date the stock is no longer subject to the substantial risk of forfeiture, if she does nothing as of the date of the transfer. The effects later will be quite severe. Ms. T does, however, have a choice as of the date of the transfer of the property (July 1, 2000, in our example). Ms. T can file an IRC 83(b) election with the IRS. If she does file this election, then Ms. T will be required to report, as ordinary compensatory income, the value of the stock as of the date of its transfer to her (July 1, 2000). In our example, this amount will be 1.00 X the 1,000 shares or only 1,000 of ordinary income. Her basis in the stock will be 1,000, and the holding period for capital gain considerations will commence as of the date of the transfer of the stock to her (July 1, 2000). Then on July 1, 2002, when the substantial risk of forfeiture expires, Ms. T will not have any further income to report to the IRS. And even more importantly, if Ms. T were to sell the stock on July 2, 2002, the 49 of appreciation realized after July 1, 2000, will be reportable by Ms. T as capital gain. The income tax effects, as of the date that the stock is no longer subject to the substantial risk of forfeiture, depends on the course of action that the employee took as of the date of the transfer of the stock to her by the employer. If the employee did nothing, as of the date of the transfer of the stock, which means that the employee did not file an IRC 83(b) election, and did not report any income to the IRS in year 2000, then the employee will have to report, as ordinary compensatory income in the year that the substantial risk of forfeiture lapses, the full value of the stock as of such date. So, in our example, by doing nothing on July 1, 2000, and reporting no income to the IRS in year 2000, Ms. T will have to report to the IRS, as ordinary compensatory income for year 2002 (the year that the substantial risk of forfeiture expires), 50.00 X 1,000 shares or 50,000. Her basis in the stock will be 50,000, and her holding period for capital gain considerations will commence as of the date that the substantial risk of forfeiture lapses (July 1, 2002). So, Ms. T will have to wait until July 2, 2003, to sell the stock if she wants to report any further appreciation in value as long-term capital gain. If the employee does file an IRC 83(b) election when she receives the restricted stock, then in the later year when the substantial risk of forfeiture lapses, the employee will not have any further income to report to the IRS. In our example, if Ms. T files the IRC 83(b) election, then on July 1, 2002, she will not have any further income to report. Her next tax event will be when she sells the stock. If the employee fails to satisfy the condition of the restrictions and, therefore, the substantial risk of forfeiture actually occurs, the employee will lose the ownership, and the company will regain the ownership of the stock. Regardless of whether or not the employee has filed an IRC 83(b) election, there will not be any income tax effect to the employee on the forfeiture and transfer of the stock back to the company, i.e. the employee will not be able to report a taxable loss of any nature on the transfer of the stock back to the company. Before the employee has reported the income to the IRS with respect to the transfer of the stock, which means that the employee did not file an IRC 83(b) election at the time of the transfer of the stock to her, and the substantial risk of forfeiture has not yet lapsed, a disposition of the stock by the employee, which can occur by reason of the employees death and by reason of any other disposition so long as the substantial risk of forfeiture remains in effect, will create rather complex income tax results to the employee. In an arms length disposition, the employee reports the amount realized through the disposition as compensation income, and IRC 83 has no further application to the transaction. If, however, the stock is disposed of in a non-arms length transaction (such as a gift to a family member or to a charity), there are two potential tax events to the employee--the disposition and the lapse of the restrictions. The disposition does not terminate the application of IRC 83 to the employee rather IRC 83 continues to apply until the restrictions lapse. If the employee is not paid anything for the stock, as of the date of the disposition (in a true gift situation), then there will not be any income for the employee to report at that time. And, then on the lapse of the restrictions, the employee (not the transferee) will report the same amount of ordinary compensatory income at that time as if the employee had not previously disposed of the stock. If the non-arms length disposition is to a charity, and if the disposition occurs before the restrictions lapse, then the employee-donor will report the compensatory ordinary income and receive a charitable income tax deduction only in the year that the restrictions lapse. After the employee has reported the income to the IRS with respect to the transfer of the stock, either as of the date of the transfer (by filing an IRC 83(b) election), or as of the date that the restrictions lapse (by previously not filing an IRC 83(b) election), the ownership of the stock for income tax purposes will be treated in exactly the same manner as the ownership by any individual of similar stock that was not previously restricted stock. The primary issue will then be whether or not, on a later sale of the stock, the owner will be entitled to report any further appreciation as long-term capital gain. The planning choices for gift planners will also then be the same as with any other stock investments based primarily on whether or not the stock is a long-term capital gain asset. There is, however, one significant remaining non-tax issue if the stock is disposed of before the substantial risk of forfeiture lapses, even if the employee has filed the IRC 83(b) election. That issue is that if the forfeiture condition occurs (in our example if Ms. Ts employment terminates before July 1, 2002), the transferee (the family member or the charity) will no longer be the owner of the stock and, generally, will not be paid anything for the stock as of the date of the forfeiture. Currently, there do not appear to be many planning opportunities, if any, to assist the employee-donors to avoid the imposition of the ordinary compensatory income during their lifetimes with restricted stock. There is one testamentary planning opportunity with restricted stock that is discussed in case study 6. If the employees death occurs after the transfer of the stock and before the restrictions lapse, and if the restricted stock plan of the employer permits a transfer to the deceased employees family members or other beneficiaries without a triggering of the forfeiture restriction, then the employees death itself does not close the compensation element of the transaction. Treas. Reg. 1.83-1(d) specifies that the compensation element in the restricted stock that remains unreported as of the date of the employees death is to be considered as quotincome in respect to a decedent.quot This is the same treatment that is imposed upon any balances remaining in any qualified retirement plans (like 401(k) plans) and individual retirement accounts (IRAs). Hopefully, most gift planners are becoming familiar with the severe tax (both estate tax and income tax) consequences that these assets are subjected to upon the death of the employee. Hopefully, also, most gift planners will also be familiar with the testamentary planning considerations that are available with IRA accounts and charitable remainder trusts. The testamentary planning considerations for restricted stock are discussed in case study 6. The fair market value of the restricted stock, as of the date of the employees death, will be includable in the employees taxable estate for federal estate tax purposes. In determining the fair market value of the restricted stock, the existence of the substantial risk of forfeiture must be considered. As previously discussed, the open compensation element in restricted stock, as of the date of the death of the employee, will be treated as quotincome in respect of a decedentquot under the IRC. By analogy, the private letter rulings that permit the testamentary transfer of IRD assets contained in qualified retirement plans and individual retirement accounts to charitable remainder trusts following the death of the participant-donor, it seems appropriate, if the employers restricted stock plan permits transfers, for the employee-donor to transfer the restricted stock (for which no IRC 83(b) election was filed and that is still subject to the substantial risk of forfeiture) to a charitable remainder trust for the benefit of the members of the employee-donors family and for the benefit of the donors favorite charities. This planning opportunity will be illustrated in detail in case study 6. Gift Planning Strategies For Stock Options And Restricted Stock Transfer of ISO stock to a charitable remainder trust. The first gift planning strategy involves a transfer of the stock acquired through the exercise of an incentive stock option as contrasted with a transfer of the incentive stock option itself. After the donor has exercised the incentive stock option, and after the donor has satisfied the 2 and 1 Rule, the donor establishes a charitable remainder trust, gives the shares of the ISO stock to the CRT and then the CRT sells the stock. This strategy provides nothing new or unusual from a planned giving standpoint except for the emphasis on the fact that the donor had owned the stock long enough to satisfy the 2 and 1 Rule. This strategy is illustrated in case study 1. Transfer of ISO stock to a charitable lead trust. This gift planning strategy also involves a transfer of the stock acquired through the exercise of an incentive stock option as contrasted with a transfer of the incentive stock option itself. The donor has exercised the incentive stock option and currently owns the stock. The donor wants to establish a charitable lead trust to benefit hisher favorite charity. The donor can establish the charitable lead trust and transfer the ISO stock to the CLT only after heshe has owned the stock long enough to satisfy the 2 and 1 Rule. This illustrates two planning principles involving ISOs: 1) the inability to provide any planning suggestions or opportunities with regard to the incentive stock options that by the very terms of the enabling IRC sections are non-transferable and 2) the need for the donor to satisfy the 2 and 1 Rule before any gift planning strategies are implemented. See case study 2. Transfer of NQSOs to a charity. This gift planning strategy is simply an illustration of the fact situation found in PLR 200002011. In this situation, the employers plan for its non-qualified stock options allows the options to be transferred prior to their exercise to family members and to charities. The grantee-donor, therefore, transfers, at hisher death, some NQSOs to hisher favorite charity before the options are exercised. After death, and after the receipt of the options by the charity, the charity exercises the NQSOs and becomes the owner of the stock. The charity then sells the stock to obtain the cash. The income tax and estate tax effects on the donors family are illustrated in more detail in case study 3. Transfer of NQSOs to a charitable lead trust. This gift planning strategy is an extension of the facts considered by the IRS in PLR 9722022. The donor, during her lifetime, establishes a charitable lead trust and transfers a portion of her options into the CLT. The plan established by the donors employer for the NQSOs allows such a transfer prior to the exercise of the options. See case study 4. Testamentary transfer of NQSOs to a charitable remainder trust. This gift planning strategy is believed to be more innovative and relies on the Treasury Regulations that require the beneficiaries of the deceased grantee-employee to report the compensation income in the NQSOs as quotincome in respect of a decedentquot when they, the beneficiaries, exercise the NQSOs after the grantee-employees death. This IRD characterization, and the prior IRS private letter rulings that allow the IRD from qualified retirement plans and IRAs to be quottransferredquot to a charitable remainder trust following the death of the IRA participant, seem also to be applicable to NQSOs. After the donors death, the donors will (or living trust document) simply requires that a charitable remainder trust be set up following the donors death and that the NQSOs or some part of them are to be transferred to the CRT. (Obviously it is imperative that the employers plan for the NQSOs allows such a transfer.) The CRT then exercises the NQSOs, and the CRT reports the IRD rather than the donors estate or the donors estate beneficiaries. See case study 5. Testamentary transfer of restricted stock to a charitable remainder trust. This last gift planning strategy is similar to the strategy discussed above except that it involves the testamentary transfer of restricted stock rather than NQSOs. In this strategy, the employers restricted stock plan allows the restricted stock to be transferred following the death of the employee, subject to the continuing restrictions. Since Treas. Reg. 1.83-1(d) categorizes the compensation element in the restricted stock after the employees death to be quotincome in respect of a decedent,quot the deceased employee-donor can direct that, following death, the restricted stock is to be transferred to a charitable remainder trust. The existing private letter rulings that allow the IRD from qualified retirement plans and IRAs to be quottransferredquot to a charitable remainder trust following the death of the IRA participant seem also to be applicable to restricted stock. See case study 6. Case Studies And Specific Applications For Stock Options And Restricted Stock The six case studies that follow will provide insights into some of the alternative ways that gift planners can assist their potential donors who are the owners of stock options with the structuring of gift transactions that provide, in each case, significant benefits for the donors or their families and for the charities of their choice. In each of the six following case studies, the assumptions set forth below have been used with additional assumptions being stated in each particular case study itself when necessary. 1 In this situation, the 141,224 of income tax savings are used to purchase a single premium, second-to-die life insurance policy, on the lives of the donors. The insurance policy was designed to perform under adverse conditions including a 10 reduction from the current earning rate. 2 In the interest of simplicity, these figures ignore the opportunity and the strong likelihood that the donors will be able to re-accumulate a significant amount of wealth over their lifetimes by using the CRT alternative, due to the fact that they will receive a significantly higher after-tax income stream from the CRT for a very long time. Case Study 2 Stock from incentive stock options, after the satisfaction of the 2 and 1 Rule, charitable lead trust. Mr. PropellerHead (PH) is an employee of a corporation, WebSite Corporation, which is a quotless maturequot business entity than Dotcom Corporation. However, WebSite has just recently successfully completed its IPO, and the future for WebSite looks very promising. In fact, some of PHs stock in WebSite, which he acquired just over two years ago from the exercise of some of his incentive stock options, has a current value of 2,000,000 and is expected to be valued 10 years from now at 8,000,000. PH and his wife have two very young children who seem destined for Harvard and Stanford in several years. Mr. and Mrs. PH have listened to the planned giving officer at their college alma mater and are ready to set up a charitable lead annuity trust (CLAT) with a portion of the WebSite stock. The charitable lead annuity trust will have a term of 10 years (to tie-in to when their oldest child will be ready for college), and their alma mater will be the recipient of the annual quotleadquot payments from the CLAT that will be set at 90,000 (4.5 X 2,000,000) for the full 10 years. The financial results shown below assume that PH and his wife both die in year 10 following the establishment of the CLAT, so that an overall comparison of the alternatives can be properly evaluated. In fact, however, PH and his wife actually live long and healthy lives, enjoy being with their family, and since they had such a positive experience with this first CLAT, they become significant philanthropists in their community. 1 This adjustment is the gift tax of 683,938 paid in the charitable lead trust example invested at 4.8 after tax for 10 years, which is then reduced by 50 for the estate tax that otherwise would be payable. 2 This adjustment is the difference between the 1,000,000 of gift tax paid in the quotgift nowquot example and the 683,938 of gift tax paid in the quotcharitable lead trustquot example invested at 4.8 after tax for 10 years, which is then reduced by 50 for the estate tax that otherwise would be payable. Case Study 3 Non-qualified stock options, transfer of the options at death, and prior to exercise directly to a charity. In addition to receiving her incentive stock options from Dotcom Corporation, Ms. Technonerd also was granted an even greater number of non-qualified stock options (NQSOs) in Dotcom. These NQSOs actually form a very significant portion of Ms. Ts overall wealth. The various tranches of the options, all of which are now vested, are exercisable over differing periods of time, at different prices. The top echelon at Dotcom are actually very enlightened, and they have amended all of their NQSO plans to allow the options to be transferred to members of the families of the grantee-employees, or trusts for their benefit, and to charities. During one of Ms. Ts conversations with her favorite planned giving officer at her favorite local charity, Ms. T came to understand the devastating income tax and estate tax effects on her family after her death when her family exercises her NQSOs. Ms. T believes that she can provide a very significant gift to her favorite charity at a very low quotcostquot to her family by amending her living trust to make a gift at her death of some of her NQSOs directly to the charity. Ms. T does make that amendment to her living trust. Her gift includes the NQSOs and enough cash for the charity to be able to exercise the options after the charity receives the options. Fair market value of option Exercise price for the stock No planning: death now Direct gift at death of the non-qualified stock option to charity Fair market value of option at death Additional cash for exercise of the option Total assets for family or charity Total estate taxes Total income taxes on IRD Net after-tax wealth received by the family of the donors Benefit to charity Case Study 4 Non-qualified stock options, transfer of the options during lifetime, and prior to exercise to a charitable lead trust. WebSite Corporation has been very interested in retaining its valued employees. So, in addition to the adoption of incentive stock option plans, WebSite has also created a number of NQSO plans. Mr. PropellerHead (PH) is one of the employees who now owns vested NQSOs. The plans for these NQSOs allow the options to be transferred to members of the families of the grantee-employees, or trusts for their benefit, and to charities. Since PH and his wife had such success with the charitable lead annuity trust that they established to provide for their childrens education in case study 2, they also immediately establish a second CLAT with a long-range view for their children. And, instead of funding the CLAT with stock, PH and his wife transfer some of the NQSOs to the CLAT instead. The NQSOs that are transferred to the CLAT have a relatively small value at the time of the transfer, and the exercise price for the NQSOs is very insignificant. Mr. and Mrs. PH understand, however, that they must also transfer enough cash to the CLAT, in addition to the NQSOs, so that the CLAT will have the liquidity to make the payments to their college over the 10-year term of the CLAT. PH again expects the value of the stock to be 8,000,000 at the end of the term of the CLAT. After the end of the 10-year term of the CLAT, the trust does not immediately distribute to the children, but the assets in the trust are then held for the benefit of the children for a number of years. As in case study 2, the financial results shown in the financial results table below assume that PH and his wife both die in year 10 following the establishment of the CLAT, but, as before, they continue to live a long, full, and philanthropic life. Fair market value of option today Fair market value of stock in 10 years Exercise priceincome tax basis in the stock in year 10 Charitable lead annuity trust payout rate Charitable lead annuity trust term No planning: death in 10 years option exercised just after donors death Gift now of the option through a charitable lead annuity trust option exercised just after donors death Value of option today Additional liquid assets transferred to the charitable lead trust Adjustment due to transfer of additional assets to the charitable lead trust Reportable taxable gift today Gift tax paid today by donors Adjustment due to early payment of gift tax Value of option in 10 years Total estate taxes Total income taxes at ordinary income tax rates Adjustment for donor estates payment of the income taxes after death in the charitable lead trust Value of additional assets remaining in the charitable lead trust Net after-tax wealth received by the family of the donors Benefit to charity 1 This adjustm ent is the additional assets of 200,000 paid into the charitable lead trust invested at 4.8 after tax for 10 years, which is then reduced by 50 for the estate tax that otherwise would be payable. 2 This adjustment is the gift tax of 115,717 paid in the charitable lead trust example invested at 4.8 after tax for 10 years, which is then reduced by 50 for the estate tax that otherwise would be payable. 3 This figure is the ordinary income tax at a rate of 40 of 3,200,000 paid in the charitable lead trust example by the donors estate after his death. 4 This adjustment is the income tax of 3,200,000 paid in the charitable lead trust example by the donors estate, which is then reduced by 50 for the estate tax that otherwise would be payable. Case Study 5 Non-qualified stock options, transfer of the options prior to exercise, but following the death of the option holder to a charitable remainder trust. Ms. Technonerd wants also to provide benefits for her daughter, following her death, from more of her Dotcom Corporation vested non-qualified stock options and ultimately for her favorite local charity. The planned giving officer suggests the following gift planning strategy to Ms. Technonerd. Ms. T and her husband think that this strategy is so significant and so powerful for their family and the charity that, without any further coaxing, they immediately make an appointment with their equally enlightened attorney who makes the appropriate amendments to their estate planning documents. The estate planning documents for Ms. T and her husband are amended to provide that following both of their deaths, a charitable remainder unitrust will be established for the lifetime of their daughter who is now 35-years old. The CRUT will provide for a payout rate to their daughter of 6. The CRUT will be funded after both of their deaths with some of the NQSOs of Dotcom that have a value of 1,800,000 and a strike price of 200,000. The gift to the CRUT includes cash of 200,000 so that the CRUT will be able to exercise the NQSOs without diminishing the principal of the CRUT. This gift planning strategy provides significantly greater benefits for Ms. and Mr. Ts daughter over her lifetime than if the NQSOs were simply transferred to her by Ms. and Mr. T after their deaths, primarily due to the imposition of the income tax on the quotincome in respect of a decedent,quot which their estate would be required to pay if the NQSOs are transferred directly to their daughter. This strategy, and its financial results, are very similar to those expected from a testamentary transfer of assets in qualified retirement plans and individual retirement accounts to a charitable remainder trust. 1 This adjustment is the exercise price of 200,000 and the estate tax of 892,360 paid from other assets in the charitable remainder trust example, which are then reduced by 50 for the estate tax that otherwise would be payable. Case Study 6 Restricted stock, transfer of the stock prior to lapse of restrictions, but following the death of the stockholder to a charitable remainder trust. This case study is actually quite similar to the strategy shown in case study 5, except that the asset used to fund the 6 charitable remainder unitrust for the benefit of Ms. and Mr. Ts daughter is restricted stock rather than non-qualified stock options. Again, the top management of Dotcom Corporation is to be commended. One of the restricted stock plans that Dotcom adopted (and, of which, Ms. T is a participant) creates quotsubstantial risks of forfeiturequot of the stock based on earnings performance goals for the company rather than the more usual restrictions based on the continued employment of the employee-owner of the restricted stock. The plan also allows the restricted stock to be transferred to members of the families of the owner-employees, or trusts for their benefit, and to charities. So when Ms. T and her husband visit their attorney to amend their estate plan to provide for the creation of the charitable remainder trust following their deaths for some of the non-qualified stock options as described in case study 5, they also include provisions for the establishment of another, but similar, charitable remainder trust that will be the recipient of a portion of the restricted stock. The restricted stock has a value today of 2,000,000. And, in fact, after the deaths of Ms. and Mr. T and the receipt of the stock by the CRUT, Dotcom achieves its earnings goals specified in the restricted stock plan and the stock is no longer restricted. Since, at the time of Ms. and Mr. Ts deaths, the restrictions on the stock had not yet lapsed, the compensation income element quotbuilt inquot to the restricted stock is considered as quotincome in respect of a decedent,quot which is potentially taxable to their daughter at ordinary income tax rates. Similarly, as in case study 5, this gift planning strategy provides significantly greater benefits to their daughter when compared simply to allowing their daughter to receive the restricted stock directly. And, of course, there is ultimately a significant benefit to the favorite charity of Ms. and Mr. T.Last time around you learned all about how to break into corporate development from getting interviews to answering questions to following up successfully. But just as with sales amp trading. the more interesting part is what you do on a daily basis in corporate development . what the lifestyle is like, how much you get paid, and what you do afterward. So lets get started with part 2 of this interview and dive into all of those plus how this interviewee got a unique experience in China out of his role. Q: What do you spend most of your time doing at the pre-IPO tech startup youre working at Partnerships MampA deals Due diligence Modeling Bottling A: Most of my work has been for MampA deals and partnerships. I mentioned that there was corporate strategy and competitive analysis as well. but I dont spend nearly as much time on those and most of my work is figuring out which products are hot and how competitors are performing in each area. Most of the deal work consists of reading through documents, modeling (mostly merger models, valuation, and also looking at deal structures such as earnouts ), and doing due diligence. Ive also been to China several times to meet with companies there and learn about our market abroad even though the company hasnt gone public yet, theyve been looking for ways to expand more quickly. As part of that Ive also had to analyze industries outside of our core business and create presentations for the senior management team here. They8217re concerned with growth because its difficult to have a successful IPO without at least double-digit growth, and if you look at the biggest and most successful tech companies out there right now, theyre often closer to triple-digit growth. MampI Note: An earnout is a deal structure where some of the payment is contingent on the performance of the acquired company. So lets say youre paying 100MM for another company if you include a 10MM earnout, you would pay 90MM in cash upfront and then the remaining 10MM later on if the company hits certain performance goals (20 revenue growth, 5MM EBITDA, etc.). Q: Right. So it sounds like you dont do much sourcing A: Not really unlike, say, smaller PE firms, they dont make me do any cold-calling and they dont track how many companies I8217ve contacted. Were well-known in the space, so if I have to contact someone I8217ll just email them and usually get a response quickly. I contacted other companies for 1-2 months in the beginning, but after that Ive only been working on deals that were brought to us. Since our market is well-established, its tough to come up with creative new ideas that the executives havent already thought of. Q: So how much time do you spend on deal work vs. competitive analysis vs. researching new markets You mentioned that you spend most of your time on MampA deals and partnerships, but whats the split MampA Deals and Partnerships: 50 Researching Industries and Markets: 25 Competitive Analysis: 25 If youre wondering about travel, Ive been to China 4 times so far in 2 years and Ive traveled domestically about 2-3 times not a huge amount, but once every 2 months or so Ill go somewhere. Q: You lumped together partnerships and MampA deals but Im assuming that theyre at least somewhat different since youre not acquiring 100 of a company in a partnership. How does the work actually differ Most readers are familiar with the MampA process but not partnerships. A: The main difference is that theres less due diligence and more deal analysis with partnerships. When you acquire another company, you really need to know what youre getting into if the books dont look right or they have some kind of random legal problem, you could end up with the next Enron or WorldCom. So you have to be incredibly thorough and bring in outside consultants, lawyers, and other advisors and spend millions to verify everything. With partnerships, though, its more like youre dating someone rather than getting married, so you dont need to scrutinize every single point in their business. But the deals themselves can get very complicated, far more so than the average MampA deal. While some MampA deals can have complex structures a cross-border deal where you acquire a subsidiary of another company or a reverse merger, for example the average deal is pretty simple: you pay a mix of cash, stock, or debt for 100 of the other company. But the average partnership has significantly more complex terms . for example, you might have an upfront payment thats based on referrals or cross-selling one of your products, then you might also get paid a certain amount for back-end or subscription sales, and then you might get some type of bonus incentive for certain performance goals. Since theres more variety to the deal structures, you spend more time building models in Excel and figuring out the key assumptions and drivers. Ladders, Hours, Pay, and Culture Q: So if you like modeling, it sounds like working on partnerships might be right up your alley. What about the hierarchy Is it like the investment banking hierarchy where you have a rigid structure and narrowly defined roles How easily can you advance, and is CFO or Group Head the ultimate goal A: The exact ladder depends on the size of your company at mine, it goes something like this: Associate (also called Manager or Analyst, it varies depending on the firm) Manager Director Senior Director Vice President C-Level positions So the titles are somewhat different from banking one key difference is that the Vice President title means a lot more here as its one removed from the top, whereas in banking its more of a mid-level role and Director is usually above VP in the hierarchy. At F50 and F500 companies, there are more levels than this for example, you might see multiple Manager levels and titles like Senior Manager or General Manager in addition to just Manager. The main difference with promotions, compared to banking, is that the timetable is more random and youre not following as strict of an up or out policy. Whereas you could become a Managing Director at a bank in 10-12 years if you start as an Analyst. youre not going to become CEO 10-12 years after you start working in corporate development in fact, that might not even be an option at all. Most likely you could become Head of Corporate Development or VP of Corporate Development, but you wouldnt go beyond that unless you could show a track record of managing large groups of people and doing more than just deal-making. Q: Wait a minute if thats true, then how do you become CEO It sounds like you cant advance to that position organically, so do you have to start a company yourself first A: I wouldnt say you cant advance naturally, but its hard to reach a C-level executive position from corporate development specifically. Our CEO was one of the first investors in the company and was on our Board as an investor long before he took over the CEO role. Before that he had also been the CEO of another company, similar to Tony Hsieh at Zappos . In the tech industry, your best option for becoming CEO is to start the company yourself, do well, exit, and then use your status to leverage your way into other CEO positions. That may not be as applicable in industries like manufacturing where you dont see conventional startups at a company like GE you could advance from within the rank-and-file, but it might take decades to reach the CEO level (see: Jack Welch ). Q: So it sounds like corporate development, or joining a normal company in general, is not the best path to riches. What about the hours Do you have to pull all-nighters and work weekends like in banking A: Overall its a 9-6 job, but occasionally I get rough weeks depending on whether or not there are live deals. So Id say the average is about 40-50 hours per week . which may climb to 60-70 with deals in progress. Ive stayed past midnight before when weve been working on live MampA deals and have been under pressure to get them announced and closed quickly, but I havent yet pulled a true all-nighter. If were not busy they would probably even let me work from home occasionally as I mentioned before, its a very small team so its not as if Id miss dozens of meetings during the day. So far, no weekend work except for when we come up on a tight deadline with a live deal. Q: So you actually get to have a life outside work, how about that are you sure you work in finance The hours sound much better, but doesnt that mean the pay is also much worse If youre not working that much, you cant possibly earn that much, right A: The base salary range for corporate development here is 90-110K USD . We also get a bonus, but its much smaller than in banking if youre at a bigger company, you might be looking at 150K all-in compensation as a first-year associate in the corporate development team. That8217s still a great number, but it is less than what youd earn as an associate in banking, PE, or at a hedge fund. Its tough to say how the pay changes as you move up the ladder, because it depends on your industry, the size of the company, and how the group works. In general, you should expect more modest pay increases compared to banking a 2 nd year associate might earn 120K in base salary and a slightly higher bonus. People above my level might make around 200-300K all-in, and by the time you get to VP and C-level positions you get into the 500K-1MM range, with some C-level executives earning in the low millions all-in. You will see lower figures at earlier stage companies, with a greater percentage coming in the form of stock grants, options, and Restricted Stock Units (RSUs). Q: Im glad you brought that up, because I was just about to ask you about that one can you tell us about stock-based compensation In banking this is something you never have to think about at the junior levels because your pay is limited to base salary cash bonus, but at normal companies you may get paid with stock options as well. How much are they worth, and what are the nuances you need to be aware of A: Ive earned around 30-40K worth of stock options over my first 2 years here that figure is based on my companys valuation in its most recent round of funding. That sounds like a nice bonus in theory, but at most pre-IPO startups these options are worthless until you can actually exercise them. That is starting to change with people like Yuri Milner at Digital Sky Technologies. who invest huge amounts in late-stage companies and give founders and employees liquidity prior to the IPO, but if youre at a lesser-known company ( not FacebookZyngaTwitterGroupon) dont count on that. Secondary markets have been growing lately as well, but again, unless youre at a hyped company there may not be much of a market for stock or options that you hold. Besides the points above, you also need to be aware of the type of compensation youre getting, the companys valuation . and the vesting period for any options you get. Q: Right, and that information might be very difficult to find depending on the company. I know you could probably write a book on those topics, but can you tell us the key points A: Sure. First, there are a couple different types of stock-based compensation: Stock Grants: You receive x number of shares in the company, which vest over y years. Stock Options: You receive the right to purchase x number of shares in the company for y price, and those rights vest over z years. Stock Awards: You receive x dollar amount of compensation, and the company then uses that dollar figure to purchase y number of shares on a certain date, and those shares then vest over z years. Restricted Stock Units (RSUs): These are similar to normal stock grants, but there are restrictions on when you can transfer or sell the stock and the tax consequences may be different. Lately, RSUs have been getting more popular in the US because the SEC requires private companies with over 500 shareholders to disclose their financial information but if you have RSUs, you dont count as a normal shareholder. So that loophole has allowed companies like Facebook to remain private and not disclose financial information for long time periods. In terms of options, the key point to be aware of is that there are ISOs and NSOs Incentive Stock Options and Nonqualified Stock Options with different tax consequences, namely that ISOs are much better for you since theyre taxed upon stock sale and may receive long-term capital gains tax treatment . The biggest issue here is getting information from your company in the first place theyre not going to share the cap table with you, so at best you might be able to get the most recent valuation from them or the total of options outstanding and the average exercise price. MampI Note: The cap table or capitalization table is a detailed breakout of shares, options, and RSUs owned by each employee and investor in the company and the accompanying grant date, vesting period, and exercise price information. If you had the cap table, you could calculate how much everyone would earn when the company is sold for a certain price. As you can imagine, this is highly sensitive and usually only the CFO and CEO have access to it. Q: OK, enough about stock options Im sure weve confused everyone enough by now. What about the culture at your company Are people laid-back or is it more intense like in banking There8217s still pressure to perform and you cant just slack off and expect to get ahead but since youre not at the mercy of psychotic clients all the time, you dont have as much stress. You still need solid attention detail, but the numbers matter more than the formatting and its not the end of the world if you forgot to change the font size on page 51 of your presentation. Most people here are older than me . so that creates some differences compared to what you see in banking. And since my department is small, Ive mostly hung out with others sitting around me but who don8217t work directly in my group (we have bullpen seating). Overall you dont get to know your co-workers as well as you do in banking, but you do get more social interaction than if you were at a small PE firm where its just you and the Partners. China, Job Satisfaction, and Exit Opps Q: You mentioned before how you had the chance to travel to China and meet with companies there how did that come up Did you jump, or were you pushed A: I never asked about it they brought it to me after I joined. The CEO was very interested in emerging markets and wanted us to look into expanding there. I had no expertise in China and didn8217t have the language skills to conduct business there but at most companies, someone knew English or we had a translator. It was pretty much just the VP of Corporate Development and I finding interesting companies in the region, emailing them to set up meetings, and then traveling there to meet them. We didnt come in with a particular purpose or say we were looking to acquire or partner with them it was more exploratory and we spent most of our time trading information, building the relationship, and seeing if we could help each other out in any way. Whats the best part of your job How do you like it compared to banking A: Overall I like it, and Ive enjoyed the day-to-day stuff more than what I did in IB. If you want to move into an operational role after doing banking, corporate development is the way to go since you work with senior management across different departments. Its a much broader role than being an analyst or associate in IBPEHF and at a startup you really have to be a jack-of-all-trades rather than just an Excel jockey. The 2 best parts of this job: You get to work on something over the long-term and you have a singular focus building your company. In IBPE youre always looking at different deals and youre not really building the business over time in the same way you do at a product-based company. You get a lot of exposure to executives . Until you advance pretty far up the ladder in banking, youre never going to interact with Group Heads or the CEO but I8217ve done plenty of that in my role here. Q: So what8217s next for you Are you going to stick around there or move elsewhere A: I mentioned this in part 1. but Im planning to apply to top business schools in the future. Ive always been interested in investing, so I see myself going to a mutual fund or hedge fund in the future if I can get into a top school and gain access like that. Q: Right, but wouldnt that be like going back to banking in that youre just looking at one-off deals rather than building 8220long-term value8221 A: Yes it would but theres also a disadvantage to working at a normal company, which is that the deals you can do are more limited and they must be related to the companys core business. Overall I definitely enjoyed this experience and if I had to go back, I wouldn8217t do anything differently (i.e. go into PEHF instead) but in the long-term I do see myself as more of an investor than an operator. Q: You mentioned applying to top business schools what are the key challenges you8217re facing vs. the typical bankerPE guy A: Someone who went to an Ivy League school, then worked at a bulge bracket bank, and then a mega-fund has top names on their resume, so its tough to compete there although my current company is well-known, my undergraduate university and bank dont have the same brand-name recognition. So rather than competing with the banker crowd directly, I get around that by positioning myself differently . There arent as many people in my position, and my industry is unique so that lets me tell a story they havent heard a million times before and give different long-term goals compared to what everyone else is saying. Q: Awesome good luck with that, and thanks again for your time. A: Sure, no problem enjoyed the chat I am a first year MBA student at a target European business school however, I was unable to secure an investment banking internship for this summer. I have around 3 years work experience in big 4 MampA advisory (financial due diligence) in the U.S. Will I still have a shot in recruiting for full-time IB positions next year Would you say corp dev would realistically be the best internship I could pursue this summer to continue to build my resume Just to clarify8230 In Europe, the banks rarely tend to recruit 2nd year MBAs for full-time. They mainly hire from the summer intern class. Is this the case in the US or would banks be willing to consider an applicant for full-time that did not complete a summer associate Ib internship If so, would you would agree that a summer internship in the US with a company in a 8220true8221 corp. dev. capacity (gaining dcf, merger model experience) would be the best experience to improve my profile given my prior experience in big 4 TAS. Banks in all regions mostly hire from their intern classes. You could still win an Associate role without a prior internship if you go for off-cycle roles, but it8217s tougher and more random. See some of the examples here: Yes, corporate development is your best option. If my plan was to do banking for 2-3 years, then corp dev for 3-5 years to gain industry experience meet contacts understand capital structure optimization and strategic expansionsamp acqusitions so I could evetually start my own PE firm. however, the opportunity to dive right into corp dev presented itself (wo the banking experience). to what extent would you say banking is even necessary. would the skills picked up in corp dev potetentially compensate for the lack of ibanking experience on the resume(given that I atleast have BIG4 TAS). Or would you say banking makes a huge difference even in the long term and should therefore be my sole focus for full time (given that a summer associate position is likely out of the question at this stage) If you have the opportunity to do corporate development full-time, you should take it. IB won8217t make a difference. It will make a difference if you want to move into an established PE firm eventually (which you would probably have to do before starting your own firm). The most desirable path is IB to PE then to HF. Do u think it would be a great career option if one were to move from ib (after working in IB for 7-8 yrs) to corporate development. i know one would have to take a bonus cut but no working for 18 hours and you have time for yourself. fixed pay is also decent so what say How much of the work in corp dev involves modelling I read a guy who described an lbo model and he said the deal he did ,out of the total work only 20 of it was modelling. which is too less imo.Which role involves more modelling and analysis It depends on what one is looking for. If you8217re looking for a change in lifestyle, it may be a good idea to move. I am not sure the of work that involves modeling, though the interviewee mentioned that 8220most of the deal work consists of reading through documents, modeling (mostly merger models, valuation, and also looking at deal structures such as earnouts), and doing due diligence8221 so I would imagine around 30-40 of the work is modeling Just a comment8230 I8217m in my 208217s and work in corporatebusiness development at a post-IPO tech startup. I8217ve been there since the pre-ipo days and report directly to the CEO. When I joined the company I basically did everything business8230sales, marketing, bus dev. Now the company is much bigger and has departments for each function. I think a lot of people don8217t realize that the job of a corporate development person is to only execute deals. You should never be the person that pitches a deal internally. This is different from ibanking where you are pitching deals all day. The product marketing person or GM of a business unit should be the one pitching the deal internally. This is difficult for ex-ibankers who are used to pitching deals. All you do in corp dev is run models and negotiate term sheets. This might only apply to the tech industry, but if you really want to run a business and be the person pushing for a deal to get done then product managementmarketing is a much better career path. The highest you can go in corp dev is CFO, which is rare. CFOs never make it to CEO in tech. Just a little forewarning8230the mampa process at a bank is completely different than a company. Corp dev people just maintain databases, models, and negotiate term sheets. You aren8217t really creating revenue for the company, which is what really matters. My advice for bankers who want to go to the corporate side and work for a tech company is to work in product marketing if you can. Doing deals is really easy. Creating a product from nothing and generating revenue out of it is hard. If you really want to climb the ladder, then you need to actually be responsible for a product. If you can generate revenue for your company, then they will let you do whatever you want after that. The best corporate development people I know in the tech industry all came from product management backgrounds, not ibanking. One thing to be careful of in corporate development is that the experiences are highly variable depending on the company. There are tons of middle-market companies with small corp-dev groups (1-3 people) that don8217t actually do any acquisitions, or do maybe one in a blue moon. They keep the corp-dev function around both because it looks good to the markets to be seen as a buyer, because it provides good market and competitive intelligence, and because maybe, just maybe, the perfect deal will come along and they8217ll pounce. Great for the company, not great for your career. So look very closely at the acquisition history of the company before you join, and don8217t believe promises about the future unless you8217ve seen past performance. Also, some really big companies (I8217ve heard that HP is one) have massive corp dev groups but only do really big deals, which means that unlike the interviewee8217s experience you will never get near the deal itself as a junior employee, but rather be stuck churning out excel models. Another downside of corp dev is that you have to deal with corporate culture and corporate politics, which is completely different from the meritocratic, ambition-driven environments you find in top banks and consulting firms. There8217s a lot of Dilbert-style mediocrity out there, and often blazing in w your fancy MBA and BB credentials can make you very threatening to the corporate middle management that has toiled away for decades to get to VP level, and if you are not careful you can get a target put on your back pretty quickly. You can even end up being threatening to the C-level (including the CEO), who at a middle-market firm may not really have any substantial MampA experience, and find Wall Street to be a bewildering and threatening place. I used to think corp dev was the bees knees, and if you hit the right spot 8211 like it sounds your interviewee did 8211 then it definitely has all the right elements to be both incredibly stimulating while preserving some lifestyle benefits. However the reality is often far from this. Obviously I8217m slightly bitter from my own experience, but just wanted to provide a counterpoint to the awesome experience the interviewee had (I have to admit I8217m jealous). Thanks for sharing, those points are definitely true. It is very hit or miss, especially at very big companies much smaller companies as well. Let me counter you Big Companies with small corporate development teams arent really worth it.There wont be much deal activity. and hoping that you will pounce on one is not a great idea.So dont go there.My boss(btw i work at the 5th largest audit firm. in audit. below the big 4) did go to a LARGE blue chip Co in their MampACorp Finance dept and there was very little activity. it was recession and they wanted her to do some middleback end work.Needless to say she quit. You said HP they do big deals. but dont allow junior analyst to get deal exposure.But doesnt the same happen in I-Banks at times. read 8216get my coffee8217 ,which is million times worse than being an excel monkey You said one has to deal with corporate culture and politics.Let me tell you office politics exists everywhere.At i-banks as you said its meritocracy.So the person who brings in the clients and the money for the firm is looked upon (not the people who work under him)The person who brings in the most amount of money is sort of treated as a demi god. as more money means more bonus and more analysts to pamper.Doesnt this create a money minded 8216Toxic culture8217 which is far worse than corporate culture (mind you. you can enjoy the latter if youre in the right place) and which is very prevelant in american investment banks. I didnt understand youre point about dilbert style mediocrity till the end of your 2nd para which ends with 8216finding wall street bewildering8217 Could you explain Id rather work in a bluechip Co8217s corp developmentfinance dept which has a good mampA history rather than at a BB.I may have less money but i will have a life,all the basic neccessities and with ability to spend on occasional luxury. id be very happy Just wanted to second J8217s point on lots of things 8211 particularly re the dilbert-style mediocrity (but to be fair also some very bright people as well, not just talking about myself), painful politics, and the rampant inferiority complexes all around. However, I did want to point out that people don8217t join corpdev teams just for nonstop deals. Most of us (at least from other folks I8217ve talked to) wanted operational experience as well. And you definitely get that from all the different projects you can work on. There are pros and cons and for the most part, I8217d say the tradeoff is usually pretty fair. Pay can be highly variable depending on company and industry though. Kudos on the awesome website I8217m interested in breaking into corporate development. I am a former IP attorney currently working in the Finance department (in a non-finance role) at a F500 company. With no finance background, how can I self-educate myself on the ins and outs of corporate development so I8217ll know what I8217m talking about when I approach, say, the VP of Corporate Development about opportunities to transition I know there8217s a lot on this website (which is great, by the way), but much of it is more specific to true banking. The best approach is to contact people (alumni LinkedIn clients co-workers) in corporate development and ask them directly what they do8230 then you get the benefit of networking as well I8217m in a somewhat similar situation. I went to a T20 undergrad in engineering then directly to grad school in Europe since I realized i wanted to break into finance. I did 2 Masters at a T20 Europe school in Int8217l Mgmt and Finance. My grades were about 3.0 average throughout. I8217m now in South America working at a holding group that owns 7 companies related to engineeringconstruction, real estate, infrastructureconcessions, and industrial services. I work in the Infrastructure department where my work is most closely related to project finance. My responsibilities primarily involve due diligence (in the sense of obtaining all the inputs before financial modeling can be done), and should the deal go through, I would also handle execution. My company is beginning to internationalize, and I feel that a formal corporate development department will be formed (or should be) and I8217m figuring out how to get involved in that area should it be formed. In my area i do relate with much of whats mentioned in this article (exposure to C-Level execs, all projects are long-term, partnerships, etc.) I took the job because the opportunity was there, but I still want to break into banking because I feel that I have way too much downtime and I want more exposure to transactions, execution and financial analysis. Now i do financial analysis, but very little as opposed to technical amp legal analysis and coordination. I work similar hours to the ones described in this article. I do also find myself the youngest one by far in my department (I8217m 24, the 2nd youngest person is 29) and while I do have friends, i also find myself wanting for more camraderie in the workplace. I8217ve had this job for 5 months now. For the time being (unless something happens) I8217m planning on sticking around to gain experience. But I do notice that moving up in this company takes a long time. I8217ve already done graduate study (not MBA) but attending top business school is something I am interested in as well if it can facilitate entry into investment banking. I feel my profile and experience are geared towards project finance, but also potentially infrastructure related finance (oil, energy, transportation, etc.) So, question: based on my profile and situation, do you have any advice, comments, insights on my profile and tips on how to move towards my goal of breaking into finance I know that networking helps, but most of my exposure is to industry executives (and not finance), plus I8217m in South America (a ways from NYC and London). Also, I didn8217t mention pay 8230 but in South America pay is shit compared to the numbers I see on this site 8230 so, obviously it8217s a motivating factor to move to NYC or London (I have US Citizenship) 8230 I moved here because of the opportunity for work experience, but the long term goal is to move back to a 1st world country (the novelty of living in a 3rd world country wears off quickly, and you miss things you used to take for granted). I8217m not sure what your question is specifically, but in general your best bet would be to go to NYC or London in-person to network at those places and focus on PE infrastructure funds or maybe larger companies that also do corporate development in those areas. I would not bother with an MBA unless in-person networking fails. Thank you for the response. To clarify, I want to break into investment banking at the associate level. I8217m going to be doing strategy development and financial analysis for my company (I just got word this week). The work and experience I know I will enjoy. However, the pay is still shit. My question is: how long should I do this job to have relatively significant experience to be able to break into investment banking as an associate by networking and not doing an MBA I8217m assuming that experience in something related to finance, like corporate development, is requisite to at least prove that I know my stuff, along with my Masters in Finance to be able to justifiably look to break in as an associate. Is this a logical assumption I don8217t think it8217s possible to network your way in at the associate level without prior IB experience unless the market is frothy. You might actually be better off trying to get into PE from there. Most large banks won8217t hire you unless you do an MBA or you8217ve done banking elsewhere before. Manuel I am very interested in your experience, and was wondering how can I contact you. I am planning to move to South America8217s infrastructure market. From someone who is familiar with the process of recruiting in general and both the world of High Finance and Startups, my question is the following is it slightly easier for someone from a non pedigree completely random background to break into the world of startups vs. investment banking When I say slightly easier, a 1 percent chance of breaking in is still better than a 0.000001 chance of breaking in. Although most of the key employees in startups today have blue chip educational and experience backgrounds, you sometimes read in the histories of both High Tech and Granola product startups of key employees from random backgrounds who manage to get hired at a early to middle stage and later end up winners on IPO day or even key executives twenty years later. I will give some examples: 1. Chris Espiona, a high level product VP at Apple happened to be Steve Wozniaks teenage computer hobby buddy. He didnt have much skill at first and just learned as he went along. He had no college degree and was hired to do grunt work in the garage. 2. One high tech startups hired some former communist, pot smoking hippie, who was willing to work in the garage for stock options as a tech grunt. Of course almost a decade later, he ends up being the CTO with 64 million dollars on IPO day. 3. One organic products company entrepreneur hires his friend from his volunteer days with some leftist third party political campaign because his friend seems detail oriented when the company is run out of his barn in Vermont. Twenty Years later he is a 5 million dollar a year Chief operating officer. 4. One environmentally friendly sporting goods company entrepreneur ( like Patagonia) meets an Australian hippie surfer type on a rock climb in Peru and senses that he is great with people, hires him as the first salesman. Twenty years larter, he is VP of marketing. To sum up, is it still possible today for a person from a random background to break into the world of startups, like the people in the above scenarios, or has the world of startups become as structured and pedigree based as finance The short answer is that it is 10000x easier to 8220get into8221 a startup with no pedigree because no one gives a crap 8211 they just care about results. Think about the 8220pedigree8221 Mark Zuckerberg had in 2003. It definitely helps to know the right people and have connections in places like Silicon Valley but it is not essential as long as you get results. I just saw an ad for this role in a real estate company in SGP, open to fresh grads or those with 1-2 yrs of relevant experience: Job description: 8230provide analytical, corporate finance and general support services to the team which will include high level Group wide interaction 8230.assisting in transaction execution and marketing 8230performing fund analysis 8230conducting market and industry research Does this sound like corp development to you Yes sounds like it I have a question regarding the corporate development part 2. I8217m currently working as an analyst in the corporate development depart at CIBC. I8217m a co-op meaning I8217ll only be here for four months. I8217m wondering if this position will set me up for IBD (in the sense that how will IB recruiters value this internship8230or do they look down on corp dev), which I8217m interested in for full time recruitment come this fall. Terima kasih sebelumnya. John They will value it, but not as much as an IBPE internship when it comes to IB recruiting. Hey, I am going for an interview at cibc corp dev. What was the interview process like Focus on fittechnicaletc Any tips Thanks Hey any chance at a Public Finance DCM interview Or, better yet, since it looks like you have a DCM interview lined up at some point in the future, could you maybe ask how it compares to PubFin Thanks. I love the site Yes both of those will be covered in the future. Have been busy close to dying due to health reasons so haven8217t had much time lately. From the looks of it, Corp Dev work is I-Banking with a lower salary ceiling, and without the banking hourslifestyle. If this is the case, I would assume that this would be a career path that would be highly sought after. I have read in some previous comments on part 1 of the series that it is easier to get a corp dev associate position out of a top B school than it is to get a banking associate position. 1) is this truly the case and if true is that solely about the money 2) if you come into B-school without banker experience trying to get into corp dev, is it better to pursue a banking internship or a consultingstrategy internship for the summer 1) Yes that is probably true, partially money but also prestige. 2) Either one works, banking is probably better for a transactional role though. This may be a stupid question, but why would a company, F500 or otherwise hire someone fresh out of MBA to a corp development role with no banking experience, even out of a HSW, when they can have a banking analyst Supply and demand. Most banking analysts don8217t want to do it, so often times firms have no choice but to hire newly minted MBAs Thanks for the reply. I guess if cash and prestige are the main driving factors that does make sense. What percent of new corp dev associates come from MBA as opposed to from banking analyst programs Not really sure about that one but over 50 probably still come from banking analyst programs. I work in CorpDev. Most people I8217ve meet in the industry went to i-banking after collegeMBA and move later to corpdev. Other than being generally accepted as the way-we-do-things, the bank prestige helps open doors for exit opps. The trade-off between long hoursno life but much more money is more appealing to someone fairly young compared to someone a bit older who wants a family or just a life in general. I recommend a banking internship over consulting. Thanks for your input Does anyone else think that being an operator and creating long term value is useful in investing actually knowing how to do it makes it seem like you8217d have an edge in spotting value accretive things. this would be especially useful if he were to target a mutual fund or a fundamental based value fund. That is a good point, but usually when you8217re investing you don8217t really assess the operations of the company in detail8230 maybe some fundsinvestors do, but most of the time it is more of a financial decision. I agree it could be helpful, but it depends a bit on the type of fund as well. I8217m in a similar situation in terms of backgroundpedigree to date: good undergrad degree (T20), but not HYP etc. and have accepted an offer with a MMMidcap bank. Attending top business school is something I am interested in as well. I8217m curious though, when you say top, do you mean HSW, M7, or top 13 Do you think your experience will be compelling to the top 3 Are you using as consultant Is there anything else you can share in this area MampI, not problem if you can answer this on the interviewee8217s behalf. Speaking for the interviewee, he is really aiming for HSW but might be willing to settle for a top 10 US program since any of those programs would be better-known than his university. He has also done a lot of things outside of work, much more than the usual bankerconsultantPE person and that helps with his story as well. He has a very specific visiongoal that is not that common (i.e. not 8220I want to become a PE Partner8221) and involves what his company is doing the experience in China. I would like to say more but then it would give away where he works. He is not using a consultant but going through friends and others who got into top business schools to get feedback.