Executives May Need Help.

Executives are “employees,” even at the level of CEO and In-House Counsel.  Their problems at times are similar to those experienced by employees at any level.  But executives have greater challenges.

One challenge occurs when an executive considers a new position and negotiates the terms and conditions.  Executives carry much responsibility and can be liable in lawsuits more readily than lower level employees.  A well drafted employment contract is a necessity.  I have presented papers at conferences on the myriad of issues involved in negotiating and drafting a good employment contract.  One general rule:  The executive needs specificity in the terms, while the company usually wants “wiggle room” with vague provisions.

Leaving the company can be equally challenging.  Even with a good employment contract, an employer can change its management, forcing the executive out.  Then the primary issue is how much does the employer owe, if anything, for failing to perform the contract to the end of the term.  Unless the contract is specific and quite clear, this question may not be easily answered.

There also are tax issues associated with an executive’s exit from a company or medical institution.  Lower level employees do not encounter these types of problems. Thus, much care is needed in this area as well.

While many employees would like to run the company, we should recognize that monumental challenges inevitably accompany an executive position.

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