Gardner Denver

Gardner Denver, an equipment manufacturing company, was acquired by private equity firm KKR in 2013 for $3.9 billion. Under the leadership of Pete Stavros, KKR's head of the Industrials group, and Vicente Reynal, appointed CEO in 2015, the company saw improved operational momentum despite initial challenges like low employee engagement and declining revenue.

Gardner Denver's method of operation under KKR emphasized broad-based employee ownership, which was championed by Stavros. This program proposed granting substantial equity stakes across all global employees, aiming to enhance engagement and performance by aligning employee interests with organizational success.

The dilemma Gardner Denver faces revolves around the implementation of this equity program as the company prepared to go public in mid-2017. The board, including both KKR and non-KKR executives, needed to evaluate the benefits and limitations of distributing approximately $110 million in equity to 6,100 employees worldwide. Key concerns included determining the impact on the company's new shareholders, the optimal implementation strategy across its multiple global locations, the cultural shifts necessary to support the program, and achieving sufficient operational improvement to offset the dilution caused by this equity distribution.