An engagement letter pricing option when key management leaves during a valuation

BVWireIssue #98-2
November 10, 2010

During the AICPA National BV Conference one member of the audience commented that he’s added a contingency to his fee agreements in case the existing CFO leaves the subject company.  ”We have multi-year agreements that set prices, with price hikes built in if there’s a new CFO,” the appraiser commented, referring to 409A work.   Great idea, considering the extra work and risk associated with negotiating assumptions with a new financial team.
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