Decisions on executive compensation require factual, legal, economic and strategic analysis. Please contact Clouse Brown PLLC for any issues arising from the compensation clauses in the employment contracts. Our lawyers are available to executives who need help negotiating compensation settlements. We also advise employers and business leaders to minimize the risks associated with compensation rules and to develop employment contracts for executives. The parties to an executive agreement on employment are the company and the head of the company. A compensation provision may have a qualifying language which, as a precondition for redress, the executive must, in good faith, properly discharge its obligations. While some statutes include compensation provisions for executives and directors, executives should not rely on such general guarantees. The compensation provisions contained in the statutes may or may not cover any potential issues that may arise. In particular, non-competition bans are highly controversial – courts do not like to limit the ability of individuals to find employment – and some states are very reluctant to impose them.
(b) the company undertakes to obtain liability insurance for directors and executives, which covers management, and to continue and maintain this policy. The amount of coverage appropriately indicates the position and responsibility of the executive during the employment mandate, but under no circumstances should the amount of coverage be less than US$20 million in the sum, provided that the cost and availability of such insurance on the market is reasonable. In addition, there are a number of important issues that can be dealt with by a written compensation agreement, which are generally not addressed by the company`s statutes. The important role and access to information enjoyed by executives means that the company should complement the executives` work agreement with non-compete agreements and confidentiality agreements. To learn more about executive employment agreements, here is a good library of resources: readers who want to learn more about written compensation agreements want to check out the May 26, 2015 contribution on the Securities Matters blog of the law firm Mintz Levin (here), which explains the importance of a separate written compensation agreement for senior executives and examines the main features that this type of agreement should include.