Highly sought-after executives with specialized experience and skills are often able to negotiate the terms of their employment agreement before they are hired. Having a clearly and carefully drafted employment agreement reduces the likelihood of future disputes and ensures you get the provisions you are entitled to, including bonuses, equity, and stock options. At Noble Law, we help C-Level and other executives secure the most favorable employment terms. Our executive contracts lawyers serve clients from our locations in North Carolina and South Carolina.
We offer review of executive employment contracts on a flat-rate basis and can generally have your agreement reviewed and discussed with you by phone or video conference within 48 hours. We make the process easy with a secure client portal for uploading your draft contract. Call today to schedule a consultation.
Equity Compensation and Restricted Stock Options (RSO)
Total compensation for executive positions may end up substantially different from base compensation due to flexible payment structures. C-Level executives, business development specialists, early-stage founders, and sales executives with proven track records and a valuable network of contacts can often command a large portion of their earnings in the form of restricted stock options (RSOs) and equity compensation.
- Equity Compensation – Some of the most lucrative pay packages will be based on equity compensation, but it is also risky. If the company offers you equity-based payment structures, you will do better if the company does better. Factors like the vesting period can significantly affect the value. Discuss equity arrangements with an employment lawyer to ensure that the terms are favorable and make sense in light of other compensation and benefits.
- Restricted Stock Options (RSO) – Shares of stock may be awarded as part of equity compensation but remain unsellable until a vesting date given in the employment contract. RSO comes with a major string attached: if the executive leaves before the vesting date, the stock is forfeited. Do not be afraid to negotiate the terms of RSOs. We can help you negotiate a fair vesting schedule and other terms like whether the company will retain the right to repurchase vested stock.
Executive employment contracts are usually drafted by the employer, but you have the right to provide input and negotiate the terms. No matter how friendly the courtship period was or how much the company wants to hire you, it is fair to assume that their lawyers drafted the contract to serve the employer’s best interests. It is only right that you have a legal representative on your side to make sure your interests are met, too. Noble Law has a wealth of experience negotiating executive contracts involving equity compensation and RSOs. These types of compensation can offer great rewards but with greater risk, so have an attorney who is familiar with executive compensation structures review the details of any contract before you sign it.
Executive employment contracts are usually drafted by the employer, but you have the right to provide input and negotiate the terms. No matter how friendly the courtship period was or how much the company wants to hire you, it is fair to assume that their lawyers drafted the contract to serve the employer’s best interests. It is only right that you have a legal representative on your side to make sure your interests are met, too. Noble Law has a wealth of experience negotiating executive contracts involving equity compensation and RSOs. These types of compensation can offer great rewards but with greater risk, so have an attorney who is familiar with executive compensation structures review the details of any contract before you sign it.
What Is Negotiable in Executive Employment Contracts?
Executive contracts can be specialized and require a trained eye to make sure all of the bases are covered. Salary is almost always the first term that comes to mind in employment contract negotiations. Issues like vacation time and job title may be a close second and third. But for executives, negotiations should also take into account terms such as:
- Base compensation, including whether it increases during each year of the contract and circumstances under which it may be reduced
- Signing bonuses
- Stock options
- Annual incentives, including quarterly or annual bonuses and whether they are awarded automatically, dependent on milestones, or at the discretion of the Board of Directors
- Minimums to be paid regardless of company performance
- Terms of equity grants
- Reimbursable expenses
- Liability insurance and company indemnification
- Scope of employment, including any restrictions on outside activities while employed and whether the executive position includes a spot on the board of directors
- Insurance and other benefits, and whether the employer or employee is responsible for taxes on benefits
- Length of employment or whether it is “at-will”
- Terms of confidentiality agreements
- Whether rights to innovations while employed are retained by the employee or become the property of the company
- Allowable grounds for termination “for cause”
- Terms of severance pay and extended benefits
- Scope of anti-competition agreements after employment ceases
- How employment disputes must be resolved
Don’t underestimate how many of the terms of your contract are negotiable as an executive-level employee. Choosing an experienced attorney to review your employment contract, advise you of your rights and of market forces that impact your bargaining power, and even enter the negotiations on your behalf can earn you respect from your new employer and secure your most favorable terms.
Negotiation of Executive Employment Agreements Is Best Done Early
Many of the disputes that arise between employers and high-level employees do not surface until relatively far down the road. For example, severance compensation will not become an issue until the employment comes to an end, whether that be in a few months or many years. However, unless the parties set out to revise the agreement, the terms that were set in the original employment contract will govern those disputes.
You may not want to rock the boat when coming into a new environment or dwell too much on matters like separation agreements and non-competes, but it will be too late to negotiate those matters when an employment relationship is nearing – or past – its end. Taking the initiative omits unwanted surprises and arms you with the knowledge of often overlooked details like the tax liabilities that can be triggered by certain benefits or how certain restrictive covenants can affect your career after separation from the company.
Speak With an Experienced Executive Employment Contracts Lawyer
If you have worked your way up the corporate ladder, your expectations and obligations may fall outside the usual terms that govern typical employment relationships. Business executives put themselves in the best position possible when they thoughtfully negotiate the terms of their executive employment agreements. If disputes arise, either during negotiation or after you are hired, you have too much at stake not to avail yourself of the legal protection provided by an experienced employment lawyer.
Executives from a wide range of industries seek counsel from Noble Law. Our services include contract review, drafting, negotiation, and litigation. Our full-spectrum employment firm can meet your needs regardless of whether you require an executive compensation disputes lawyer, a gender pay gap lawyer, or an attorney with an emphasis in another area of employment litigation. We serve North Carolina and South Carolina, offering in-person and video conferences for the convenience of our clients. Executive contract planning is most effective when tackled proactively, so do not delay.
Speak With the Employment Contracts Attorneys at The Noble Law
If you have questions about your employment contract or are involved in a contract dispute with your employer, The Noble Law is here to listen, understand, and support you. Our trusted counsel for workplace disputes puts you in the driver’s seat by arming you with all the information you need to fully protect your rights and interests. Our team of talented attorneys proudly serves clients in North Carolina and South Carolina. Call an employment contract attorney to schedule your free consultation today.