Archive for February, 2012
Employment deals require that the attorney think and serve as a strategic advisor, as the consigliere (akin to the Tom Hagen model from Coppola’s The Godfather). One must see the “big picture,” as well as the details, all in line with the overall strategy. And one MUST listen to the client and address his/her goals, being reasonable about what can and cannot be accomplished. Determination to deliver by the attorney is key to a successful deal.
The compensation package of Eugene Isenberg, former CEO and now chairman of Nabors Industries, Ltd., including a proposed $100 million termination payment, illustrates the far extreme of executive compensation. While institutional shareholders brought suit to challenge his compensation, wasn’t there due diligence before investments were made?
The critical concept in the negotiation for the renewal of an executive employment contract is LEVERAGE. The answers to the following questions will determine if the individual has leverage in renewal negotiations. How valuable is the individual to the enterprise? What is the executive’s track record, either there or at prior companies? What has been offered to the executive or the person in the same position in the past? What are the comparable packages in the industry? The executive should keep in mind the words of Mahatma Gandhi; “if you don’t ask, you don’t get.”
Wall Street compensation does not appear to be the only target these days as foundations are coming under increased scrutiny. Handsome severance packages have been provided within the four corners of executive employment agreements. The Wall Street Journal reports such is the case at the National September 11 Memorial and Museum. Query whether the net impact of these packages will be a reduction in funding and/or contributions in the non-profit arena.