Executive compensation plans may also include provisions on what is the responsibility of the executive in the event of termination of employment or change of ownership or control of the company. Monkhouse Law`s labour law specialists have experience in reviewing, negotiating and improving compensation plans in executive employment contracts. Contact us today for a free 30-minute telephone consultation. Executive compensation differs from one employment contract to another, but there are general categories of compensation that are often used to ensure that executives receive competitive compensation. These categories are: Understanding the components of executive employment contracts can help you get fair compensation and protect your long-term interests. Before signing the contract, senior managers often use an experienced labour law specialist to identify areas that can be negotiated in your favour, potentially problematic clauses to be aware of, and whether other contract penalties are enforceable. The term “golden handcuffs” is used when an officer is paid a certain amount of money, but only after he has stayed in the company for a predetermined period. This discourages executives from staying in positions for a short period of time and helps to ensure that executives work with the company more than temporary periods. Employment contracts for executives are more demanding.
It seems that the older a position, the more complex a compensation plan is. Gold parachutes are provisions that provide that in the event of a change of ownership or control of the business, a sum of money, ownership, stock option, pension income and/or insurance or annuity is paid to management. These measures may be less intended to compensate the executive than to proactively prevent hostile business acquisitions by increasing the costs associated with the takeover. Perquisites, better known as “benefits,” are cash privileges. These are often granted in addition to financial compensation and can include a wide range of benefits. Companies are often adapted to the individual circumstances of executives and what they need or want, given their working conditions. For example, gym memberships, mobile phones and other technologies whose spouse comes abroad on business trips, education reimbursement plans, holidays, golf or country club memberships, home security and the use of corporate or private vehicles or planes to travel.