M&A HR due diligence that finds change-in-control and retention issues before Day 1 — each one cited
Change-of-control and retention issues found before Day 1, each one cited.
See one case, screen by screen ↓Software that helps the buyer's HR integration team read a target's HR data room before closing — agreements, plans, policies and the census — and know what every person is owed, which level they land on and what employees will be told. M&A HR Due Diligence adds six agents that file every document, extract each term with its passage, check it against local law and the integration plan, and map every title to your levels.
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Between signing and closing the HR integration team gets a data room and a few weeks. In it sit the employee census, executive and change-in-control agreements, retention letters, non-competes, equity, severance and benefit plans, collective agreements, policies and job descriptions. From them the team must know what every person is owed if the deal closes or their role changes, which level each title lands on, whether every plan keeps the merger agreement's promise to employees — and what to tell people on Day 1. Today that is a spreadsheet, outside counsel's hourly reading and a lot of guessing.
The cost hides in the gaps between documents. Change-in-control terms sit in plan documents as well as individual agreements: a single-trigger clause vests on closing alone and is a certain cost on the closing date, while a double trigger depends on who loses their job. The law follows the place of work — a non-compete cannot be enforced against an employee in California, is limited to 12 months in Massachusetts and needs garden-leave pay or other agreed consideration there, and needs written reasons in a Dutch fixed-term contract. And a relocation in the integration plan can hand a key scientist “good reason” to resign and collect.
Estimated split of reviewer days for a 642-person target, by hand and with the solution. The solution's own dashboard estimates the full contract-term register in about 4 days instead of about 4 weeks by hand.
Specialist agents read the data room, extract terms, check them against local law, level every title and price the cost; the integration lead confirms.
Northwind Bio has signed to buy Lumora Therapeutics in a share purchase: 642 people in Cambridge, Leiden and San Diego, closing on Nov 20. It is Oct 7 — 44 days to close. Here is what happens next, screen by screen, in the working solution.
Lena's home screen is the whole workforce: 410 people in Cambridge, 180 in Leiden under a works council and collective agreement, 52 in San Diego, which closes in June 2027. On the Northwind level lens, 508 levels are accepted, 77 proposed and waiting, 57 need her decision. Beside the dots, the clocks to close: antitrust clearance Oct 27, works-council advice Nov 6, Day-1 FAQ approved by counsel Nov 10, the 401(k) board resolution Nov 13.
Decisions behind the dots: “Retention letter · Dr. Aisha Bello — New in the data room today · not read yet.”
She switches the dots to Change in control. The cost is $38.4M if every eligible person qualified: severance on a double trigger $11.9M, equity that vests if the person is let go $16.2M, equity that vests at closing $5.4M, retention letters $4.9M. She clicks the closing-vest row and only the amber dots stay lit — clustered in Cambridge research rows.
“44 people in Cambridge hold 2018-plan options that vest in full at closing, whether or not they stay. 38 are in research. That $5.4M is certain on Nov 20 — the rest of the cost depends on who leaves.”
Data room update 14 brings 38 new HR files, read at 07:52. One tops Contracts, marked New: A-07, a 4-page retention letter for Dr. Aisha Bello, VP Medicinal Chemistry in San Diego, signed Sep 5, 2026, under California law. Lena opens it.
The agreement waits for her: “Four agents read the 4 pages, pull every term with its passage, test it against the law where the person works and the integration plan, and price what it would cost. You confirm what they find.”
Each step runs in view. The data-room classifier attaches the letter to Dr. Bello's record. The contract term extractor pulls 8 terms, each with its passage — lowest confidence 90. The covenant and law checker reads her good-reason clause against the integration plan, and the cost is priced: retention paid early, plus severance, plus equity — about $1.80M.
“Read by 4 agents · 8 terms with their passages · 11.4 s”
Her letter lets her resign for good reason if her place of work moves more than 35 miles (§4). Integration plan v3 §4.2 moves medicinal chemistry from San Diego to the Cambridge, MA research campus by the end of Q2 2027. Both passages sit side by side, with the exposure: $240,000 retention paid early, $459,000 severance at 12 months base plus 100% target bonus, about $1,104,000 of equity — about $1,803,000 if she resigns for good reason.
The checker cites both passages and proposes; counsel confirms the legal reading.
Lena has three choices on screen: raise it for counsel with a retention addendum, keep the role San Diego-based to Nov 2027, or mark it not an issue. She raises it. Issue I-14 lands at the top of the Day-1 issue log — High, with Omar Haddad, employment counsel, due Oct 14 — beside the 60 days' WARN notice to close San Diego, the best-net cutback on the CEO's and CFO's payments and Dr. Rafael Moreno's non-compete that cannot be enforced in California.
“Raised for counsel · retention addendum proposed · Lena Ortiz, today · issue I-14 with Omar Haddad, due Oct 14.”
The job matcher maps 52 Lumora titles onto the Northwind job architecture; 42 are accepted, covering 508 of 642 people. Principal Scientist covers 31 people. The census shows 19 lead a program on their own and match P5; the other 12 lead sub-projects and match P4. The evidence runs row by row — scope, experience, external profile, the census fact and pay — each with its source. Sam accepts the split or sends it to calibration.
The job matcher never levels by title alone; a person accepts every level.
Nine plans — seven US, two Dutch — are tested against the merger agreement: pay and target bonus no less favourable, benefits substantially comparable, until Nov 20, 2027. The cost to keep the promise is $3.0M a year, marked as an estimate. Time off and medical wait for a bridge decision; the 401(k) ends Nov 19 with Lumora service credited for vesting. Of 64 Lumora policies, 41 are aligned and 6 need a decision.
Confirmed terms become short, plain answers, each with its source and no individual data. “Will my salary or bonus target change? No. For at least 12 months after closing your base salary and your target bonus stay at least the same.” Five of 13 answers are approved by Omar Haddad; benefits and time off are drafted and waiting for counsel. Lena publishes once counsel approves.
Nothing is published without counsel approval.
The same deal, seen by the four people who answer for it before closing — what their weeks looked like, and what they look like now.
Specialist agents read the data room, extract terms, check them against local law, level every title and price the cost; the integration lead confirms.
Reads each file in the HR folder of the data room, decides what it is — agreement, plan, policy, census, job description — across 14 families, and attaches it to the right person or plan; keeps every version and marks superseded ones.
Pulls notice, severance, change-in-control trigger, good-reason definition, equity treatment, restrictive covenants and governing law from each agreement — with the exact passage and a confidence for every term.
Proposes a Northwind level for every Lumora title from the job description, census facts and pay, and splits a title by a census fact when people with the same title differ — with the evidence row by row.
Lines up every Lumora plan and policy with Northwind's, applies the merger agreement's test — no less favourable for pay and target bonus, substantially comparable for benefits — and estimates the annual cost to keep, match or bridge.
Tests each term against the law where the person works, the merger agreement's employee promise and the integration plan — relocation against good-reason clauses, payment dates against the 12-month promise — and explains each problem with both passages.
Writes the answers employees read on closing day from confirmed terms, the merger agreement and approved decisions only — plain words, under 40 words an answer, one citation each — and logs every open question as an issue with an owner.
Confirms; counsel approves. The agents propose; a named person decides.
Ask about any person, agreement, level or plan — or say what to change. Every answer points to its passage.
What does change of control cost us?
About $38.4M if every eligible person qualified: severance $11.9M, equity that vests if let go $16.2M, equity that vests at closing $5.4M for 44 people, and retention letters $4.9M of the $5.0M allowed. Only the $5.4M is certain: 2018-plan options vest on Nov 20 whether or not anyone leaves. The best-net cutback lowers the CEO's and CFO's payments.
Which San Diego agreements does the move trigger?
The integration plan moves San Diego roles to Cambridge — about 2,600 miles — so every San Diego relocation clause is triggered, whether it says 35 or 50 miles. A rule now re-tests these clauses whenever the integration plan changes; it is in Settings and on the audit trail.
What is the 280G position?
Two people pass the golden-parachute line of 3× five-year average pay: the CEO at about 3.4× and the CFO at about 3.1×. Both agreements use a best-net cutback, no gross-up, so the payment is reduced if that leaves them better off after tax. Sam Patel owns issue I-02, due Oct 24.
Draft the Day-1 answer on flexible time off
“What happens to flexible time off? It continues through 2026. From Jan 1, 2027 you have at least 25 days plus Northwind's 11 holidays.” Lumora employees took 23 days on average, and the merger agreement promises substantially comparable benefits for 12 months — 25 days keeps that promise. It is in the Day-1 FAQ, waiting for counsel.
13 screens from the working solution, on its sample data. Pick one to see it large.
Who sees what, the checks every agreement goes through and who approves each decision are settings, and rule changes are versioned.
| Setting | Default | Choose from |
|---|---|---|
| Show names and pay | On | On · Off — only clean-team members see individual names, pay and agreements; everyone else sees pseudonymised, aggregated numbers |
| Relocation clauses | On | Flag a “good reason” relocation clause when the integration plan moves the place of work further than the clause allows · On · Off |
| Retention before the 12-month mark | On | Flag retention payments that fall due before the employee promise ends (Nov 20, 2027) · On · Off |
| Covenants follow the place of work | On | Check non-competes against the law where the person works — California, Massachusetts, the Netherlands · On · Off |
| Golden-parachute test | 3.0 × | Flag change-in-control payments at or above this multiple of five-year average pay · 2.5× to 3.5×, in steps of 0.1 |
| Confirm agreement terms | Lena Ortiz | Lena Ortiz · Sam Patel |
| Legal reading of covenants and Dutch contracts | Omar Haddad | Omar Haddad · Outside counsel |
| Day-1 FAQ | Omar Haddad, then Lena Ortiz | Omar Haddad, then Lena Ortiz · Lena Ortiz only |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample deal data · “target” = the design goal, measured in the live solution · “estimated” = our estimate. Sources: WTW, Landrum HR and Safeguard Global HR due-diligence checklists; US Internal Revenue Code §280G and §4999; California Business and Professions Code §16600; Massachusetts Noncompetition Agreement Act (M.G.L. c.149 §24L); Dutch Civil Code art. 7:653 and Works Councils Act art. 25; US WARN Act. People and companies named on this page — Northwind Bio, Lumora Therapeutics and their staff — are fictional, characters and sample data in the working solution.
Software that helps the buyer's HR integration team read a target's HR data room before closing — agreements, plans, policies and the census — and know what every person is owed, which level they land on and what employees will be told. M&A HR Due Diligence adds six agents that file every document, extract each term with its passage, check it against local law and the integration plan, and map every title to your levels.
The contract term extractor reads change-in-control triggers, severance and equity treatment from individual agreements and plan documents alike. The cost is split into severance on a double trigger, equity that vests if a person is let go, equity that vests at closing and retention letters — and each part lights the people who carry it, so a single-trigger cost certain on the closing date stands out from cost that depends on who leaves.
Yes. The covenant and law checker tests each non-compete against the place of work — unenforceable against employees in California, at most 12 months with garden-leave pay or other agreed consideration in Massachusetts, written reasons required in a Dutch fixed-term contract — and explains each problem with both passages. Counsel confirms the legal reading.
The job matcher compares each title's scope, experience, external profile, direct reports and pay with your level profiles, and splits a title by a census fact when people with the same title differ. It never levels by title alone, shows its evidence row by row, and a person accepts every level before the HR-system load file is built.
Yes, with an aggregated view. Until closing only clean-team members see names, pay and agreements; the integration office and others see pseudonymised, aggregated numbers. Leiden employee data stays in the EU region.
Yes. Agents read and propose; the integration lead confirms every term and decides each finding, the compensation and benefits lead accepts levels and bridges, and employment counsel approves legal readings and the Day-1 wording. Nothing reaches employees without counsel's approval.
Yes. Who sees names and pay, the relocation, retention-timing and covenant checks, the golden-parachute multiple and the approver for each decision are all settings, and every rule change is versioned.
The Agentic Solution Engine builds and deploys it from your requirements and documents — your job architecture, benefits guide and a sample past data room — and it goes live once every quality gate has passed. We will walk you through it on your own deal documents first.
Only the people a change touches retrain, all before it takes effect
1-min demoGxP Training ComplianceAn inspector's training question answered with cited records in minutes
1-min demoHR Policy Self-ServicePolicy answers for each employee's own country in seconds, clause quoted.
1-min demoWe'll run M&A HR Due Diligence on a sample of your own past data room.