Investment Banking interview preparation
Every question below is either traced to a named firm from a public candidate report, or tagged at desk level when we could not trace it. Answers are written the way you would actually say them out loud — answer first, then the mechanism, then the limitation.
100 questions, mapped to the firms that asked them
- Questions
- 100
- Traced to a firm
- 100
- Firms
- 46
- Updated
- September 2026
042What is the difference between management rollover and management incentives?CitiMergers and Acquisitions · New York · 2026
Say this
Rollover is management reinvesting its existing equity into the new deal instead of cashing out. Incentives are new equity granted to management going forward, usually options or a management incentive plan that vests on performance.
Then walk it
- Rollover is backward-looking value. Management already owns shares; instead of taking the cash, they roll some percentage into the new capital structure alongside the sponsor.
- It reduces the sponsor's cheque size, which is helpful, and it signals confidence, which buyers care about. It can also be tax-deferred, so management has a reason to want it.
- Incentives are forward-looking and dilutive to the sponsor. A typical management incentive plan is five to fifteen percent of equity, vesting on time and on a return hurdle.
- In a model they sit in different places. Rollover is a source of funds in the sources and uses table. The incentive pool is dilution to the sponsor's exit proceeds, so it reduces the sponsor's IRR, not the entry price.
- The reason both exist: rollover aligns management on the downside because their own money is at risk, and the incentive plan aligns them on the upside. A sponsor wants both.
Where candidates lose it
Conflating the two, or putting the incentive pool in sources and uses. Rollover funds the deal; incentives dilute the exit. Getting that placement right is what the question is actually testing.
Expect next
- How does the incentive pool affect the sponsor's IRR?
- How much rollover would you expect management to do?
- Where does rollover sit in the sources and uses?
Reported by candidates at Citi (Mergers and Acquisitions, New York, 2026). Source: Wall Street Oasis.
Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.