Executive Employment Agreements – Part 2

When you are negotiating an executive employment agreement, there are several categories that should be addressed. In general, they are responsibilities, compensation/benefits, termination and restrictive covenants.


It is important to clarify your duties, any performance goals, your authority within the organization, and your budgeting authority in your employment contract. You will need to understand who you will report to, if you have the power to hire or fire other employees, and any other activities that will impact your employment.


Your compensation package is one of the most important provisions you will negotiate. Your base salary is only the starting point. You should also make sure you understand the bonus structure, which should include your signing bonus, performance bonuses, and any claw back provisions. You will want to confirm your benefits such as health care, dental care, disability, retirement and pension benefits. As an executive, you should negotiate your grant of equity, its taxation, vesting and your rights as an equity holder. Finally, make sure there are provisions for your expense reimbursement for travel, professional membership costs, and relocation expenses.


It may be difficult to think about severance from the company when you are just joining it, but it is the best time to negotiate those terms while you have leverage. Your employment contract should set forth the events that would trigger your severance (referred to as the “for cause” events), as well as what happens if you are fired without cause or you decide to quit.

Restrictive Covenants

It is common for employers to include restrictive covenants in executive employment agreements. You should fully understand your non-compete provisions, which restrict you from working for competitors when you separate from the company. Your contract will also likely include provisions regarding non-disclosure, confidentiality, non-disparagement, and non-solicitation limits. You should review these restrictions closely because they will impact your ability to move to a new job in the future.

When it comes to negotiating an executive employment contract, you should retain experienced counsel to increase your bargaining position. protect you. Your employer will likely have legal counsel on their side, so having a lawyer work with you will help ensure that your contract is fair and reasonable. Additionally, having an attorney familiar with your employment contract is beneficial if you later need to negotiate a retention agreement.