Staffing Architecture

The key elements of the Firm’s staffing model include the following:

• Shared Firm values. CD&R adheres to a series of shared values that provides a clear set of guidelines for all the Firm’s commercial dealings. These shared values of integrity, candor, respect, loyalty, passion, creativity, courage, perseverance and teamwork have created an exceptionally tight and committed partnership dedicated to functioning at the highest level of performance.
• A highly skilled and long-tenured partnership. The senior team’s unique combination of investment and operating experience is integrated throughout the value-building cycle from sourcing to exit. CD&R’s Financial Partners are experienced private equity investment professionals who have largely been promoted from within the Firm. Altogether, this team has led the Firm’s most prominent and successful investments in the past 15 years.
• A “one firm” culture with a relatively flat incentive structure and single primary, global fund. CD&R has carefully developed and nurtured a “one firm” culture by adopting an incentive structure for Financial and Operating Partners that is closely linked to the long-term interests of the Firm as a whole. A hallmark of CD&R’s culture is the desire to succeed as a group, rather than as individuals. Economics are broadly divided among the Financial and Operating Partners, not concentrated in the hands of a few individuals, and the Firm operates a single profit pool. This approach creates a highly collaborative and collegial culture that results with multiple Partners typically involved with sourcing, portfolio value-building, and, ultimately, the investment’s success.
• CD&R sourcing efforts leverage the Firm’s relationships and expertise across geographies. CD&R is able to field global teams to identify and evaluate global businesses for potential investment. The Firm has sourced U.S.-based investment opportunities from European-based parents and created differentiated insight into European operations of the businesses of U.S.-based sellers. With roughly one-third of the Firm’s professionals based in Europe and a developing network of strategic relationships in Asia, CD&R’s global reach is particularly valuable in sourcing and evaluating new investment opportunities that involve companies that are multi-national in scope or that require complex, cross-border execution capabilities. For example, Diversey was a U.S.-headquartered business operating in approximately 175 countries, while Rexel was a European-based company that operated in 37 countries. When CD&R examines global businesses, such as Univar, Hertz, Mauser or Brand, the Firm’s sourcing strategy and investment decision-making is informed by CD&R Financial and Operating Partners who have lived and worked in dozens of markets around the world and who understand the culture, regulations, labor markets, and customer and supplier behaviors that are critical to sourcing transactions.
• Broad participation in Firm processes. Every CD&R Partner plays an important role in one or more of the Firm’s key processes: weekly “investment pipeline” meetings, monthly Partner meetings, Investment Committee meetings, Operating Reviews, and ongoing engagement with portfolio company management teams. Although individual Partners take leadership roles in managing each of these processes, a key aspect of CD&R’s culture is the cross fertilization of experience.
• Deep bench of advisory operating capabilities. An experienced group of Advisors, engaged by the CD&R funds, and representing a range of industry and functional experience from around the world, supplement CD&R’s full-time, in-house operating capabilities. The Advisors’ major engagements include portfolio company Operating Reviews, providing advice on the recruitment of senior executives for portfolio companies and helping to shape CD&R’s leadership culture. The Advisors allow the CD&R funds to broaden their operating capabilities and networks, as well as supplement the Firm’s industry expertise.
• Culture of continuous improvement. The Firm continues to upgrade its operational approach. CD&R Operating Partners are deeply engaged with portfolio management, offering support, advice and direction on core business processes - going far beyond the typical board reporting relationships. They are focused on innovation and growth, framing expansion strategies for rapidly developing economies, and building effective management leadership teams. The Firm recognizes that a critical element for long-term value creation is top-line sales and revenue growth. Traditional cost and productivity drivers alone may not provide the boost they once did and this fact has and will continue to influence the profile of the operating talent the Firm seeks to recruit. Sir Terry Leahy, one of the most admired global business executives based on his leadership in growing Tesco into the world’s third largest retailer, joined Jack Welch as a Senior Advisor to advise the funds and to increase their revenue-growing capabilities. Likewise, Operating Partners Vindi Banga, Former Executive Board member of Unilever; John Compton, former President of PepsiCo; John Krenicki, former GE Vice Chairman; and Paul Pressler, former Chief Executive Officer of The Gap, bring significant top-line growth skills and insights and innovation.
• Career development. CD&R is committed to identifying and implementing an improved framework for managing the development and promotion of the Firm’s Partners, Principals and Associates. Partners undertake a formal and thorough self-evaluation, as well as candid assessments of other partner’s contributions and effectiveness, on an annual basis. CD&R established a Professional Development Committee in 2009. The Committee created a comprehensive framework for managing career progression, from each stage as a Principal to each level of Partner performance and compensation. In addition, formal Annual Review processes were implemented for both Partners and Principals.