Everyone wants job security, and people may assume that executives have plenty of it. That is not necessarily the case, however, as executives can be hit with job loss for any number of reasons. Maybe share prices drop, or the company merges or is bought. Maybe there is a push for a change in business culture. These things happen, and they happen often.
In any case, before signing an employment agreement, it is a good idea for executives to negotiate to have protections built into the contract. In addition to base salary and benefits, following are a number of items that you may want to address in your executive employment agreement:
- Bonuses, annual and signing
- Trade secret protection
- Non-compete provisions
- Non-solicitation provisions
- Stock options
An executive contract should clearly define the grounds on which the company can terminate your employment. With the help of a business law attorney, you can negotiate for a provision that requires the employer to give you written notice if there are grounds for termination. It may also be possible to include a clause that allows you a period of time to correct any problems that may otherwise result in your employment being terminated.
Costly litigation can result from ambiguous executive employment agreements, and if you can, it is a good idea to include a clause in your contract that requires the employer to cover your legal fees in the event that a legal dispute over the agreement arises.
Individuals with questions about employment contracts are encouraged to explore the business law website of Shulman Bastian Friedman & Bui LLP.