What happens to my stake when our group sells to a staffing company?

What the stake actually was

Price the conversion by first pricing the original. A partner owns more than a job. Marit Health setting data shows the shape of that premium: self reported average total compensation runs $497,500 for the self employed and $461,000 for medical groups, against $428,500 for hospital and health system employment. Some of that spread is setting and region, and some is the ownership return itself: distributions beyond clinical pay, a vote on contracts and schedules, and an equity claim with value only when it converts, at a sale, a buy out, or a wind down.

Partnership equity in a private medical group is illiquid. Its value on any given Tuesday is a formula in the partnership agreement: a stated value, a multiple, or a book value calculation. The sale is the moment the formula meets a real buyer with real money, which is why the terms of the conversion matter more than the headline price the buyer announces.

The conversion: cash, earnout, and paper

Sale proceeds reach partners in shapes with very different values, and the mix is the negotiation. Cash at closing is the only shape worth its face amount on day one. An earnout is a promise to pay more later if the group, the site, or the contract hits targets over the following years, and it should be priced at a discount in your own planning for three reasons: the targets can be missed, the hospital contract itself can be lost during the earnout window, as the lost contract question works, and the earnout usually requires you to still be working there when it pays. Rollover equity or stock in the buyer is the third shape: ownership continues, translated into a larger and even less liquid company, with a value that depends on a future sale you do not control.

The partnership agreement governs how the total is split: by ownership share, by a seniority formula, or by a blend agreed years earlier for exactly this event. Sale proceeds may also first satisfy group debts, fund wind down costs, or settle retirement plan work, including a cash balance plan termination where the group adopted one, before partner checks are written. Learn which lines come out of the headline price before your share is figured.

The new contract, the noncompete, and the old entity tail

The buyer is also buying your future shifts, and its employment contract is a second transaction inside the first. Compare it line by line against your partner economics: the rate against the Marit Health frame, where the median is $31 per wRVU and the middle half runs from $27 to $45, the schedule and night expectations, the term and termination rights, and pay for administrative roles the partnership used to reward with distributions. The renegotiation question works the rate frame in full.

The noncompete inside that contract has the longest shadow. Partnership life may have carried no restrictive covenant, or one owed to your own group. The buyer contract almost always carries one owed to the buyer: a radius, a duration, and covered sites that can include hospitals you have never worked in. Signing it can mean leaving the buyer means leaving the market, which converts a voluntary exit plan into a relocation plan. Covenant scope is most negotiable before closing.

Malpractice tail on the old entity policy is the line that follows partners home. If the group policy was claims made, claims for care already delivered must be covered after the entity dissolves, and someone pays: the group from sale proceeds, the buyer by contract, or the individual physicians by default and by surprise. The purchase agreement should name the tail payer explicitly. Silence means the cost lands wherever the old policy and state law drop it, and that address is often yours. Close with the personal checklist: beneficiary forms and titling get a fresh audit, and the proceeds land at the taxable tier beside written goals.