What Are Some Key Considerations for Executive Employment Contracts in New York?

Business executives contemplating changes in employment, career shifts, and moves to new cities must carefully negotiate the terms of their employment agreements. While you can proceed without legal representation, you are strongly encouraged to seek the legal counsel of experienced employment law attorneys in your state. Our New York law firm has extensive experience assisting executives with their employment contracts, helping them understand the nuances of New York employment laws, assisting them with employment disputes, and providing legal advice to help them get the most compensation for their services.

New York is an at-will employment state. With a few exceptions, employment relationships can be terminated by either party at any time, sometimes for no reason. For this reason, among so many others, it is wise to have a written agreement spelling out the employment expectations and compensation for that employment. As an executive-level business employee, your employment and the end of your employment will significantly impact your personal, financial, and legal well-being.

What Are the Executive’s Expected Duties and Responsibilities?

While it may seem obvious, it is always wise to establish the expectations for both the employee and the employer in the employment agreement. This will include clearly stating the duties of the executive, provisions for the termination of employment, and clarification on exclusive services, if applicable.

In the interest of both parties, it is essential to confirm the position and support for the newly signed executive. This may include establishing performance targets, providing a board position, dictating expected responsibilities, reporting structures, and authority given to the executive. Companies and executives should also discuss staff, budgets, and facilities.

What is Negotiable?

Every executive employment agreement includes several negotiable factors, including, but not limited to, compensation and benefits, stock options, job perks, and club memberships. Additionally, executives may negotiate special terms related to their responsibilities and job performance, including decision-making authority, performance metrics, etc.

Other factors that may be negotiable include termination clauses, non-compete agreements, dispute resolution mechanisms, severance packages, renewal provisions, and relocation packages.

Are There Short-Term and Long-Term Incentives?

Many companies offer incentives to high-level employees who sign up to join their companies. These may include long-term and short-term incentives.

Short-term incentives may include bonuses paid at the end of the year. However, a signing bonus may also be worth negotiating. Long-term incentives are often incorporated into compensation plans to ensure that executives remain effective in their positions of authority. Long-term incentives may include golden parachute clauses and stock option plans.

What is the Expected Duration of Employment?

Is your employment at a company for a fixed amount of time? Does the employment contract provide details for instances of early termination, either with or without cause? And what constitutes cause?

These questions, among many others, must be satisfied in a comprehensive employment contract for executives. It is better to prepare for the unexpected now and not need those plans than to face those unforeseen occurrences without a plan. Whether you believe your employment with a company to be long-term or short-term, it is wise to establish the expected duration of employment in the contract.

When Should You Negotiate a Severance Package?

It may benefit both sides to negotiate a severance package upfront. By addressing severance terms in the initial negotiation of the employment contract, executives can protect themselves in the event of unexpected job loss. Well-negotiated severance packages provide executives entering new phases of their lives with a certain level of financial security and peace of mind.

To ensure that your severance package looks after your interests, don’t hesitate to contact our legal team for assistance.

Have You Considered Incorporating Equity Awards into the Employment Deal?

With the presumption that equity awards will be incorporated into the compensation package, it is necessary to determine what form or type of equity award will be provided should the parties reach their performance incentives, share business ownership, or hit other objectives.

Contact our New York law office for legal guidance.

What if the Contract and Terms for Compensation Are Vague?

Compensation for executives is more than health benefits and base salary. It may include equity in the company, smartphone allowances, paid time off, and more.

If the employment contract is vague about compensation and the language of the agreement is open to interpretation, you must raise issues with these matters to protect your interests and ensure that you get what you deserve in the agreed-upon deal.

Do You Need the Legal Services of Employment Law Professionals?

If you have reached the level of an executive employee, you should never consider signing any employment documents without first allowing your attorney to review them. When you receive a job offer, reach out to employment lawyers to review the contract terms and help you negotiate for a more favorable agreement.

Our law firm has extensive experience representing clients across New York in complex employment cases. Contact our firm today to schedule your initial consultation with our legal staff.

How Strict Are Non-Compete Clauses in NY?

The FTC recently issued a nationwide ban on all non-compete agreements except for agreements that apply to senior executives.

Non-compete agreements are also subject to certain legal limitations in New York. To be considered enforceable under the law, they must be reasonable in scope, geographic restriction, and duration.

If your agreement prohibits you from competing with the employer after termination, does this limit your employment options to such a degree that it puts you at financial risk? Similarly, are you prohibited from soliciting from the employer’s clients and employees? And what of a confidentiality agreement? You and your attorneys must consider all these legal matters.

How to Navigate the Prospect of Mergers and Acquisitions in an Executive Employment Agreement?

A thorough executive employment contract should include language related to the potential for future mergers and acquisitions, such as company sale-related provisions, retention bonuses, and golden parachute clauses.

These unique nuances can play a significant role in the business’s and its employees’ financial and legal obligations. Careful consideration must be given when preparing and signing any employment contract.

We strongly encourage you to seek professional legal counsel from experienced employment attorneys when negotiating the complexities of mergers and acquisitions and how they affect employment contracts.

What Are Golden Parachute Clauses?

Golden parachutes are unique provisions stipulating that should the company change ownership or control, an executive will be paid a predetermined amount of money, pension proceeds, insurance or annuity proceeds, stock options, and or property.

In many instances, these measures are less about compensating the executive and more about proactively guarding against the prospect of hostile takeovers by increasing the cost associated with such an acquisition.

What Happens in Employment Disputes with Executives?

Attorneys often need to review and revise employment agreements to help executives avoid future pitfalls and misunderstandings.

If either the business or the executive decides to leave the employment agreement early, an experienced attorney can also draft terms to handle such a situation before a legal dispute and litigation become necessary.

However, if a legal dispute should arise, you must retain professional legal representation from experienced attorneys. Contact our law firm for legal advice.

Contact Us for a Free Consultation

Navigating employment contracts can be complicated, especially for executives. For legal guidance throughout the process, please contact our New York law office.

Our New York law firm has extensive experience representing clients, including some high-level executives, and complex employment contract negotiations and disputes. To learn more about our legal services, don’t hesitate to contact our Brooklyn-based law office at 314-648-2586.