Posts Tagged ‘contract’
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.
The jury’s decision in favor of Donald Drapkin, former employee of MacAndrews and Forbes, highlights the nuances of contract language - distinctions between substantial performance and material breach. To avoid cases like these, why not allow for a reasonable period within which to return company property, and not penalize the employee if items are discovered months if not years after the severance has been paid, provided good faith can be shown on the employee’s part. We will have to see if the judge sets aside the verdict.
Today is a Strategy Day. Today’s strategy is “GET IT IN WRITING!!”
Seems obvious, but you would not believe how many individuals start employment without a writing. This happens regardless of the law requiring offer letters in many jurisdictions.
While “GET IT IN WRITING” are words that you would expect to hear from an attorney, it really holds true. You should not leave one job until you memorialize and both parties sign an agreement to the terms of the new job.
Bring as much clarity to bear as possible – make sure as much of the deal is spelled out in written form signed by both employer and employee. Don’t forget specifics concerning financial terms, benefits, perquisites, equity, and the impact of different events of termination on those pieces of the package.
And by asking for the terms to be in writing, you will take the “employment temperature” of the prospective employer. You will learn a lot from the answer to your request for a written document.
How many of you have been in the predicament of starting a new job without the protection of a written agreement or offer letter?