Executive Employment Negotiation

Executive Employment Lawyer Discusses Executive Employment Negotiation

Executive Employment Lawyer employment agreementAn executive employment lawyer may be able to help negotiate your employment agreement. It can be challenging to negotiate employment agreements. Companies often do not like written employment agreements. Some go as far as refusing to consider them. They want to maintain as much control as possible, and a written agreement may result in taking away some of that control. From the perspective of the company, the fewer obligations it has in writing, the better.

Executives’ Expectations

Executives may have expectations about what they need to do their jobs, such as holding power and authority, and the financial incentives they will receive. They want these agreements to spell out their stock options without restrictions or preconditions. Therefore, executives view these agreements as necessary to make sure their expectations are met. Executives also tend to ask for items such as guarantees of compensation and overrides of management discretion. They want the company to share the risk that, in the long run, the executives’ employment may not work out for reasons that are outside of their control. Companies often try to make employment agreements favor them instead of the executives. You should keep negotiating your employment agreement until you are happy with it. Executive employment lawyers may be able to help you negotiate your agreement.

The Company’s Challenge

Companies are more familiar with negotiating commercial agreements than negotiating executive employment agreements, and there are big differences between the two. Companies see negotiating executive employment agreements as more personal and far less objective, so they often believe they have bargaining leverage in negotiating these agreements. In the eyes of the company, the company is the one offering the executive the position and the opportunity to work. However, companies that have this mindset do have vulnerabilities. While a company may find a competitive negotiating style serves it well, this is a counter-productive mindset when it comes time to negotiate an executive’s employment agreement. By the time the company and the executive are finished with negotiating, the company has already invested both time and energy in interviewing other candidates and comparing its options. The company may not realize that the trust between company and executive may be fragile. That trust might be jeopardized if the company negotiates unrealistically.

Building Trust

Executives want to believe that the companies have their best interests in mind. However, the companies might only be looking out for themselves. During the negotiation process, a company needs to find ways to reinforce the trust it is building with the executive. When a company is trying to get an executive to leave a position, for example, the company needs to show the executive that it is not just concerned about what it can gain from the arrangement.

Proposals

Executives also want companies to take them seriously, especially where proposals are concerned. If the company’s goal is to have a dedicated executive who prioritizes the company’s interests, then the company needs to be sensitive to what the executive needs and react with care and consideration to the executive’s proposals. When negotiations leave the executive feeling like the company is not trustworthy or credible, the negotiations have failed and possibly doomed the relationship.

General Counsel

Finally, companies can create tension and conflicts of interest when they ask their general counsels to handle employment agreements. A general counsel does not want to be known as untrustworthy. The general counsel’s desire to be credible and honest may go against the company’s desire to be inflexible and take strong positions. In order to maintain a trusting relationship between himself and the employee, a general counsel may not be willing to engage the executive in employment negotiations.

The Corporate Challenge

When a company understands how these issues make it vulnerable, the company may adjust its strategies to eliminate these vulnerabilities. Once negotiations are concluded, you should believe the company had your best interests in mind. The company will not necessarily compromise on everything, but the company should negotiate until an agreement is reached that suits your needs. Executives who have negotiating experience generally understand why a company feels the need to exercise restraint. These executives understanding the personal and subtle factors present in negotiations and can use those factors to benefit themselves. This gives the executives leverage even if the executives do not use this leverage. Many do not, fearing they will look like they lack confidence in the company and not wanting to be perceived as self-centered or difficult to work with. Executives who have a good understanding of negotiations realize that they are a process. These executives understand that the company will only change its proposed draft employment agreement if it suits the needs of both parties. These executives also recognize that the company is as interested in how the employee acts during negotiations as it is interested in the outcome.

The Company’s Power to Terminate

The fact that the company has the ability to terminate any employment agreement means the company is always more powerful than the executive. You may want to pursue a favorable separation package in case your position is terminated without good cause or a resignation. This may make the company reconsider terminating your contract due to factors such as personality conflicts, not being right for the company’s culture and other subjective reasons.

Separation Packages

A separation package should protect the executive’s right to receive proper compensation and bonuses. At the same time, the executive should avoid making the company anxious that he or she is too worried about being protected against a termination that is justified. A successful negotiation keeps both parties’ interests in mind and leaves both thinking better about the other after the negotiation ends. Executive employment lawyers may be able to help you negotiate a separation package.

Contact an Executive Employment Lawyer

For more information on employment agreements, contact Costanzo Law Firm at (408) 993-8493 for a consultation. A lawyer may be able to help provide information about agreements and help you negotiate when the time comes. An executive employment lawyer may prove to be a valuable ally as you negotiate with your company.

 

 

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