After slices in the company have been allocated, it may be necessary for the company to recover some or all of it in the event of separation from employees. Absentee owners are individuals who own part of a company, but are no longer actively involved. This is sometimes referred to as “dead” equity. Professional investors tend to avoid investing in companies with too many absentee owners so the company needs a mechanism to recover shares from people who leave the company.
As you will see, the multipliers in the Slicing Pie model create consequences for individuals when they make decisions that adversely affect the company and vice versa. These consequences provide protection for both parties and, in many ways, are the “secret sauce” that makes the Slicing Pie method so effective and fair.
The recovery of the slices is dependent upon both the nature of the separation and the nature of the relationship with the individual.
Nature of the Separations
There are four primary reasons an individual would separate from a company:
These terms are very similar to those commonly found in American employment agreements.