DEFINITION of 'Management And Employee Buyout - MEBO'

A restructuring initiative that involves both managerial and non-managerial employees buying out a firm in order to concentrate ownership into a small group from a widely dispersed group of shareholders.

BREAKING DOWN 'Management And Employee Buyout - MEBO'

MEBOs are generally used to privatize a publicly traded company, but can also be used as an exit strategy for venture capitalists or other shareholders in an already private firm. MEBOs can often be seen as bringing greater efficiency to a firm's production because it can provide added job security to employees, which motivates them to give a stronger effort to improve company profitability.

RELATED TERMS
  1. Employee Buyout (EBO)

    An employee buyout (EBO) may refer to a restructuring strategy ...
  2. Managerial Accounting

    The process of identifying, measuring, analyzing, interpreting, ...
  3. Employee Stock Ownership Plan - ...

    An employee stock ownership plan (ESOP) is a qualified defined-contribution ...
  4. Employee Share Ownership Trust ...

    Similar to other stock programs, an employee share ownership ...
  5. Performance Management

    Performance management is the supervision of employees and departments ...
  6. Diluted Founders

    A slang term often used by venture capitalists to describe the ...
Related Articles
  1. Managing Wealth

    5 Low-Cost Perks for Small Business Employees

    Money isn’t the only way to motivate employees. Here are some savvy strategies even the smallest business can use.
  2. Insights

    Goldman Sachs: Dispersion Creating Opportunities

    Goldman Sachs latest research piece
  3. Small Business

    Whom Should Corporations Please?

    Companies balance the interests of owners, customers and employees. Find out who comes out on top.
  4. Small Business

    5 Unique Ways To Increase Office Morale

    The five techniques outlined in this article provide well-researched ways to improve employee morale and productivity.
  5. Small Business

    Why Companies Stay Private

    Many private companies prefer to stay private and find alternate sources of capital. Find out what firms have to gain by eschewing the windfall from a flashy IPO.
  6. Financial Advisor

    Why Do Businesses Benefit From Life Insurance on Employees?

    Companies can buy life insurance on their employees and collect the benefit proceeds. Find out why companies want to benefit from the death of their employees.
  7. Retirement

    Is a SIMPLE IRA Right for Your Small Business?

    Here's how small businesses can benefit from offering a SIMPLE IRA to their employees.
  8. Personal Finance

    Financial Wellness Programs: How Employees Benefit

    More and more employees, regardless of age, career or income, are turning to their employers for help with their personal financial plans.
  9. Managing Wealth

    Know Your Shareholder Rights

    Common-stock owners have numerous privileges and should be vigilant in monitoring a company.
  10. Small Business

    3 Reasons to Develop an Employee Handbook for Your Small Business

    Learn how a small business can benefit from an employee handbook covering labor laws, codes of conduct, leave policies and media relations.
RELATED FAQS
  1. What are common scenarios in which managerial accounting is appropriate?

    Understand the difference between managerial accounting and financial accounting. Learn common scenarios in which managerial ... Read Answer >>
  2. What are common concepts and techniques of managerial accounting?

    Understand the difference between managerial accounting and financial accounting. Learn about the common concepts and techniques ... Read Answer >>
  3. How does financial accounting differ from managerial accounting?

    Learn about the main differences between financial accounting and managerial accounting, including why one is highly uniform ... Read Answer >>
  4. How does privatization affect a company's shareholders?

    The most recognized transition between the private and public markets is an initial public offering (IPO). Through an IPO, ... Read Answer >>
  5. How do firms improve their employees' human capital?

    Learn what human capital is, how a firm can benefit from improving human capital and some ways a firm can improve its employees' ... Read Answer >>
Hot Definitions
  1. Working Capital

    Working capital, also known as net working capital is a measure of a company's liquidity and operational efficiency.
  2. Bond

    A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows ...
  3. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
  4. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
  5. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing a company that measures its current share price relative ...
  6. Internal Rate of Return - IRR

    Internal Rate of Return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.
Trading Center