Redundant employee costs
Payroll proposed as an earnings add-back because the roles are expected to end. Whether the adjustment is justified depends on the work that must continue and the costs of replacing or removing it.
Redundant employee costs in round numbers
Hypothetical annual US$ millions: a seller proposes a 0.20 payroll add-back. Diligence rejects 0.12 because necessary work will continue, leaving an accepted adjustment of 0.08, or 40% of the proposal. Removing two of four roles would not by itself establish half the payroll savings.
Terms Related to Redundant employee costs
Go-forward compensation · EBITDA add-backs · Diligence-adjusted EBITDA · All of the glossary