When executives leave a company, they often negotiate a separation agreement. Negotiating this agreement involves several elements that both parties must carefully consider to ensure a fair and enforceable arrangement.
Understanding these elements can protect the interests of the executive and the company.
What to include in the agreement
The agreement should clearly list any compensation, benefits and terms of departure. It should cover severance pay, bonuses, stock options and other owed compensation. It should also outline how the company will handle health insurance, retirement plans and other benefits.
Understanding your rights
It’s important for executives to understand their legal rights and duties. This includes clauses about not competing with the company, keeping company secrets and not speaking badly about the company. These clauses can affect future job opportunities and reputations, so it’s important to negotiate them carefully.
How to handle severance pay
Severance pay is a key part of the agreement for executives. The amount can depend on how long the executive worked there, their position and the reason for leaving. Try to negotiate a severance that reflects your time and effort at the company and helps you while you look for other jobs.
Making the agreement clear
The agreement needs to be clear and detailed. This prevents misunderstandings and disputes later on. Make sure it clearly states what each party needs to do and when. This includes when the executive’s last working day will be, how and when severance will be paid and any ongoing duties.
Getting legal help
Before signing the agreement, get a lawyer who specializes in employment law to check it. This can make sure the agreement is fair and follows the law. A lawyer can also point out any unfair terms that might need to be discussed again.
Negotiating a separation agreement requires thoughtful discussions and careful planning. By doing this, executives can secure a deal that supports their future plans and goals.
