Senior Executive Compensation

It is important for employers to give careful thought to the terms of senior executive contracts.  On the one hand there will be a wish to fully incentivise the senior executive which will mean that careful thought needs to be given to the reward structure.  On the other hand thought needs to be given to the damage which can be caused upon termination of the relationship.

Employers often seek advice from us in relation to executive pay structures and also in relation to post-employment restrictions.  The latter need to be very carefully drawn up with the role of the particular senior executive in mind and the precise nature of the damage that he or she could cause should he or she leave to join a rival or to set up his or her own business in competition.  

Courts start from the stand point whereby they wish to encourage freedom of movement but will uphold post-employment restriction clauses often known as “restrictive covenants”, provided that employers can show why they are absolutely necessary to protect the interests of the business concerned.  Employers often seek advice around these issues.

Also, employees entering into a contract often seek advice to ensure that they are not putting themselves in a difficult situation.  

We also often give advice at the end of the relationship, advising on compensation packages and drafting relevant documentation.  The advice might be on behalf of the employer or the employee.