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From Private to Public – the Importance of Reward and Remuneration

An initial public offering (“IPO”) is no small feat — it typically requires companies to transform their operating models to meet investor demands and heightened regulatory scrutiny. As part of this repositioning, executive remuneration frameworks should be recalibrated to align with the post-IPO strategy. The run-up to an IPO presents an ideal opportunity to modernise the executive reward framework to ensure leadership incentives support long-term value creation, reinforce shareholder alignment and stand up to scrutiny from investors, regulators and proxy advisers. When done right, we see five steps that should be carefully considered in the context of IPOs.

Resetting Remuneration and Reward Strategies for IPO Readiness

Despite continued macroeconomic uncertainty and following several years of more muted listing activity, 2025 saw an increasing number of companies listing within the UK and across Europe, the Middle East and Africa (“EMEA”) as a whole. Despite a sluggish start, 23 companies listed on the London Stock Exchange in 2025, boosted by a late surge that saw 11 listings in Q4 alone.¹ Although activity across EMEA lagged behind 2024, certain markets rallied against a more challenging year. The Nordics, for example, saw a substantial increase in the number of listings, with 16 IPOs during the first half of 2025 alone, demonstrating large pockets of investor confidence prevailing in the face of economic headwinds.² Recent market insights from our 2026 Global CFO Survey suggest that 17% of EMEA participants are preparing for an IPO, with nearly half of those being from the UK.³ Together with the strong pipeline of expected listings across EMEA, 2026 seems to be the year of the ‘IPO rebound’.

It is paramount for companies exploring a public listing to ensure that remuneration and reward strategies drive the desired behaviours of leadership and are robust enough to withstand cultural and governance changes. Remuneration structures that previously served privately owned or founder-led businesses well will require a fundamental reset once a company enters public markets, as investors, regulators and employees scrutinise how value is shared. Large proxy advisors, which influence investor voting and ESG rating agencies which can affect fund flows, also have high expectations of executive remuneration.

Designing remuneration frameworks in the lead-up to an IPO is therefore not purely about retaining key employees or maintaining a competitive edge; it is also about instilling credibility, aligning incentives with long-term value creation and meeting heightened regulatory and investor scrutiny. The pre-IPO period is a critical moment to review and reset.

Preparing for Greater Transparency and Accountability Post-IPO

Privately owned companies typically enjoy broader discretion over pay structures than publicly listed companies. Incentives may be bespoke and heavily geared towards value creation around a specific event, typically through granting equity to employees, particularly the C-suite.

On the contrary, in a listed environment, discretion — at least after the initial period of becoming a listed company — is often overridden by transparency and shareholder returns. Remuneration frameworks must stand up to external benchmarks, regulatory disclosure and voting by institutional shareholders. Whilst some companies choose to retain legacy reward structures following listing and defer changes until they have scaled, it is more effective and impactful when companies choose to follow the mindset of a listed company from the start. Building credibility through an appropriate executive remuneration policy sets the tone for how companies will approach their broader responsibilities in the listed environment.

A transparent narrative that clearly articulates remuneration and reward policy is critical. As explored in our recent article, The Importance of Numbers and Words in IPOs, the IPO is not a finish line for management teams but a starting point of operating under sustained public market scrutiny. Clear post-listing communication — through transparent reporting, consistent updates and narrative continuity — helps maintain trust and support valuation beyond the initial IPO phase. In this context, a strong narrative can be the difference between an IPO that simply lists and one that truly lands.⁴

Key Considerations for Working Towards an IPO

An IPO can be a highly stressful process, putting considerable pressure on internal resources as they manage numerous stakeholders both internally and externally. Resetting remuneration frameworks doesn’t need to be a ‘pinch point.’ The steps below, when followed and supported by professional advisors, can help smooth the transition towards a listed remuneration framework.

Reviewing legacy arrangements: Pre-IPO, incentives are often event-driven; post-IPO, investors are looking for senior executives to drive value and build on shareholder return. Failing to distinguish between the pre- and post-IPO environment and between legacy and forward-looking remuneration schemes can undermine company strategy and create misalignment between reward philosophies, desired C-suite behaviours and investor expectations.
Focusing on pay for performance: Upon listing, investors expect executive reward to demonstrate clear alignment between pay and performance, with a meaningful portion of remuneration delivered through variable pay. This is usually achieved not through granting equity or ‘skin in the game’, but through the choice of performance metrics, vesting schedules and setting stretching yet achievable targets.
Choosing appropriate performance metrics: Establishing robust performance metrics that support the company’s strategic objectives is key. These need to be well articulated through disclosure to enable stakeholders to understand how they support and align with long-term goals. Without this, there is an increased risk of investor and proxy advisor scrutiny, which can undermine confidence in the company’s governance framework.
Successful onboarding of a remuneration committee: While mature private companies often operate a remuneration committee as a matter of best practice, it is generally an expected minimum upon listing. Bringing an independent and experienced remuneration committee on the listing journey as soon as possible, or at least ensuring that an existing remuneration committee is sufficiently experienced in operating within the listing environment, will help develop a robust post-IPO remuneration framework and engage with investors and proxy advisors, socialise executive pay and anticipate future voting dynamics.
Building an effective internal and external communications strategy: Even well-designed remuneration frameworks can fail if poorly communicated. Internally, C-suite executives must understand how their pay may evolve upon listing — structural changes must be carefully explained to mitigate perceptions that their new remuneration packages are less attractive than before. Early dialogue can help surface and resolve concerns in advance of a listing. Externally, IPO disclosure documents, prospectuses and early annual reports must explain reward structures concisely, avoiding excessive complexity or defensive language. The narrative, and the tone created by communications, can be a deciding factor in ensuring that there is buy-in.

Evidently, remuneration and reward set the tone for the future. As company objectives shift from exit readiness to long-term returns, the philosophy underpinning reward incentives and creating alignment must also evolve. Executive pay is both an outward demonstration of company values and a statement outlining priorities for the future.

1: “New Issues,” London Stock Exchange (March 2026)

2: “Strong IPO trend in the Nordic region in 2025 – how to build trust ahead of a future listing,” Avancom (August 2025)

3: “2026 Global CFO Survey,” FTI Consulting (February 2026)

4: “The Importance of Both Numbers and Words in IPO Success, FTI Consulting (January 2026)