We sat down with our own Tim Ferguson at The Noble Law to discuss some of the strategies top-earning executives use to negotiate their equity-based compensation.
Tim’s background includes negotiating equity compensation disputes, contracts, structuring debt and equity financing, advising on control disputes, as well as analyzing stock options in litigation dispute. He shared some insights into improving negotiated executive compensation with us.
These contractual items include, for example:
• The relative percentage of the award (or size) from the client (/number of shares)
• The vesting schedule or milestones
• Whether or not there are any rights to acceleration of vesting
• Whether or not there are any repurchase rights
Tax considerations could include:
• Classification of the equity award
• Timing of taxable events
Securities considerations include:
• Transferability of awards
• Insider trading considerations
Aside from the equity component, severance is also an important component of executive pay. There are a number of issues within that context that are important to consider. In particular, triggers and duration of severance and potential tax concerns.
Executive compensation levels tend not to be very transparent. How do I know if I'm getting my market value?
Several companies also perform benchmarking of executive pay. There are many commercial products available with information of this type.
As a mid-six figure executive, I've been approached by a head-hunter for a competitor. What do I need to know about my non-compete and maintaining/liquidating some of my holdings?
I've got golden handcuffs, but I'm considering going out on my own. What strategies do I need to consider for not leaving money on the table?
Do you have a burning question regarding executive compensation issues? Please post a comment below and we’ll answer as soon as we can! For personalized legal advice and services please book a consultation.
For more information on Tim Ferguson and employment legal services, visit TheNobleLaw.com. The Noble Law Firm provides clarity at work. Founded in 2009, The Noble Law Firm in Chapel Hill, NC provides forward-thinking, trusted employment law counsel and assertive representation on key employment issues to individual employees and company management.
Disclaimer: The information contained in this page is for general informational purposes only and does not constitute legal, tax, accounting, or investment advice. If you require legal representation you should contact an attorney respective to your matter as soon as possible.