EP Wealth launches cash incentive plan tied to firm valuation

EP Wealth is rolling out a new cash‑based incentive program for all non equity‑owning employees, a move CEO Ryan Parker expects will cover about 500 to 550 staff by year‑end.

The EP Shared Prosperity Program will issue grants to employees based on their salary or annual compensation. The grants will convert to cash payouts based on the value growth of the RIA during “qualifying events” at EP Wealth, which has about $45 billion assets under management and has current minority ownership stakes held by Ares Management and Berkshire Partners. 

“This is a cash-based program, but it is tied to the overall valuation of the company and the unit price of our underlying equity,” Parker told InvestmentNews. “Let's say [for example] you get 100 units at $100 per unit [... ] let's say that we've now tripled the company value to $300 per unit. Then that person is going to get, in this fictitious case, 100 units times the $300 of value.”

M&A fuels growth for EP Wealth

The CEO added “we're not looking to become a public company, we're not looking to sell a majority of the company,” indicating that likely qualifying events would include sales from EP Wealth’s current private equity investors. Berkshire has been a minority investor since 2020, while Ares invested in EP Wealth last year as Wealth Partners Capital Group also exited its position. WPCG had held a minority stake in EP Wealth since 2017.

“You do have to be employed when it happens, so if someone leaves in 2028 and the qualifying event happens in 2029, they won't participate [in the payout],” said Parker. “Every employee will get a one-time grant, but it's every year. So it's not just the team who's here at the end of 2026. Everyone who joins us new in 2027 will get a grant, everyone who joins us new in 2028 will get a grant [etc].”

More than 80% of client assets managed at EP Wealth are by an advisor who owns equity in the company, said Parker. The new cash-based program is specifically for employees who do not own existing common equity or profit participation units in EP Wealth, which has grown its AUM by 41% from the start of 2025 through the first quarter of this year.

The latest Form ADV from EP Wealth recorded its total headcount at 618 employees. Parks adds that about 170 employees currently own equity or profit participation units. EP Wealth secured $500 million in debt financing last September and has been among the RIA industry’s most active acquirers, most recently announcing this week that it bought Silicon Valley-based firm Opes Wealth Management.

Competing in the industry's war for talent

Opes marked EP Wealth’s fifth acquisition so far this year, with Parker saying EP has completed about 55 over the past decade. The new Shared Prosperity Program is intended to support EP in what Parker calls the “war for talent” to recruit across the wealth management industry.

“We believe that programs like this are going to put us in the best position to not only attract but be able to develop and retain the best industry talent,” said Parker. “I think that we as an RIA industry need to be doing more to just attract the best talent to our industry, meaning the RIA model, in my opinion, is the best model to serve clients. I actually do hope that more RIAs do find ways to have programs like this, because we want the best people in the fiduciary space.”

Earlier this year, the mega-RIA Edelman Financial Engines announced it was committing $175 million to give equity to all current and future advisors at the firm. Other private equity-backed RIAs that have rolled out employee equity programs over the past year include Bogart Wealth and Mercer Advisors. 

“What we're trying to do here is have everyone aligned to the same metric, which is let's grow the company sustainably, let's grow it in a way that creates value based on the unit price and the overall enterprise value,” Parker said. “If people feel great about the work they're doing and know that the company is supporting them and investing in them, they're going to stay long term. That's been my experience at other companies. That's our expectation here.”

Parker joined EP Wealth as a chief growth officer in 2021 and he was named CEO in 2023. He held previous roles as CEO of Edelman Financial Services and managing director at LPL Financial, with his career having started on the asset management side at Putnam Investments, Franklin Templeton, and Russell Investments.