Not everyone is fortunate enough to have a contract with their employer. Executives with specialized skills and experience that are highly recruited in the marketplace often have the leverage to negotiate an employment agreement before their hire date. While this is often a time of mutual courtship, it also an important time to plan for the eventuality of an exit – and possibly a less than amicable exit.
C-Level executives, early stage founders, biz dev specialists and sales execs with a proven track record and a fat rolodex can often command a substantial percentage of their earnings in the form of equity compensation or RSOs (restricted stock options). Equity compensation is also referred to as “compensation at risk”. If the company does well, you may do well. If your division does well, but the overall company does not, then your contract will obviously guide the payment structure. Many companies like the idea of equity compensation because it lowers early cash flow and ties future compensation to future performance. Executives that are less risk adverse prefer the upside of equity compensation as a way to improve their total earnings.
If the contract has been written by the employer, it is fair to assume – no matter how much they want to hire you – that they have covered their interests. It’s up to you to make sure that you cover yours. No doubt their contract was written by an attorney – makes sense for you to have your agreement reviewed and revised by an employment attorney to level the playing field.
We offer a flat-rate review of executive contracts, provide a secure client portal to upload your agreements, and often can have a your agreement reviewed and discussed with you by phone or video conference within 48 hours.