Thursday, September 19, 2002

Peppering up the previous entry I feel a bit bad about putting such a dry (albeit, I hope, useful) entry today.  As counter measure I include a real story as related to me by a dear friend.  Before you get the wrong ideas about my friend, let me be absolutely clear that she is one of the most well read and educated people I know.  I mean, she could dance circles around Bullfinch if her were alive today in all matters pertaining to Greek mythology...  Here is her story in her own words: So, I've been printing these protocols all morning and putting them into binders (each is 150+ pages long)...I look up to see that my boss has emailed me yet another one.  I yell into his office, "No more!!"  He says, or at least I *think* he says, "It's like syphilis", so I respond, "No, more like herpes, you can't get rid of it!" He chuckles and says, "Actually, what I had in mind was that guy who's condemned to push the rock up the hill for eternity, but now I know where your mind is..." 11:39:09 AM    comment []

Executive Employment Agreements -- Some info Yesterday I attended a morning seminar that dealt with approaches to negotiate your severance agreement when you interview for a job.  When done well, the results can be staggering -- I personally know of a person who negotiated a 2-year salary if the structure of his job were to significantly change.  It did and he got an amazing severance. I felt that the seminar had some good information, and those of you in executive positions may find the information I am posting useful.  Clearly, I am not offering any guidelines -- you will have to use your judgment what information to use and how to use it.  At the same time, I hope this will help some of you to negotiate the tricky waters of today's job scene. This is just a portion of the material.  This is not a typical blog for me, but if I get good feedback and interest on the part of the people that check this blog out, I will post the rest, probably in two or three additional installments. The three Rules Get it in writing Get it up front Get it to Go Practice Pointer: Use e-mail to "clarify" otherwise undocumented understanding between you and your employer.  The idea here is that e-mail is an informal communication tool and people "relax" when they use it.  If there are certain things that your employer intentionally did not spell out in the agreement, s/he may spell it out in an e-mail.  This could be used later on in adversarial situations to your advantage.  Clearly, you need to be mindful of that fact that this is a double edge sword... Get it up front: Think clearly on how you would like the components of your compensation to be broken down between Salary+Bonus, Equity and Benefits.  Think like an investor -- you will be investing your time if not your money.  Make sure to have the following points clarified and documented: Vesting Acceleration Repurchase Rights Change of Control Provisions.  I was not familiar with this term.  "Change of Control" means a significant change in the structure and operation of the company.  That could mean change of upper management, the composition and number of board members, company ownership (if it was purchased by another company for instance), etc.  This will become fairly important in further bullets. Be willing to tie you bonus to performance.  Duh!  But it is an important point, and one may even be able to negotiate himself into a job with a higher earning potential.  By willing to take a larger percent of salary as bonus, but having a significantly larger bonus in the case of success you could do very well for yourself. Get it to go.  Meaning, make sure that in case of termination you don't end up outside in the rain.  In order for that to happen you want to make sure that the following is spelled out as much as possible: Grounds for Termination.  Under what circumstances could your employer terminate your employment with them?  If this is specific enough they may not be able to kick you out on a whim. Dispute Resolution.  What would be the process in case a dispute arises?   You may agree you will not resort to a court of law but use outside arbitration instead.  This may save you huge amounts in attorney fees. Severance.  This is fairly self explanatory Post termination obligations.  This is crucial and will be dealt with below.  It involves all manner of non-compete agreements, and obligation to speak well about your old employer, etc. Grounds for Termination.  This is an non exhaustive list: At will – your boss does not like the type of shoes you wear to work By company with or without good cause By you with our without good reason Upon Change of Control (see definition above) Upon the Expiration of the agreement – this is in case you were brought in to do a specific job for a specific period of time.  It is not a consulting engagement, but rather a circumscribed job for which you were hired. Greater Severance payments are made if the termination is: By employer without good cause By you with good cause Upon change of control Definition of good cause for the Employer.  Clearly your definition and the definition of your employer may be different. Employer: Death Disability Willful misconduct Deliberate dishonesty Criminal conviction Misuse of alcohol/drugs Unsatisfactory performance Lack of capacity Breach of the agreement Changing business needs Read: anything under the sun You: Death.  In other words, the only good reason for you to have your employment terminated BY YOUR EMPLOYER (not you) is if you kick the proverbial bucket.  Massachusetts residents can use a State court case to support their cause if they were terminated not for a good cause.  The case is Boothby v. Texon, Inc. 414 Mass. 486 (1993) Definition of Good Reason for you to leave the employer You.  If there are changes in any of the following, it’s kosher for you to leave: Your title Your Status Whom you report to Your official duties Your official responsibilities Your compensation (if it is lowered, I assume.  I never heard of anyone leaving because they got an increase) Location of your office Travel expectations – if all of a sudden you need to travel significantly more than in the past Read: any reason under the sun Employer: Dissolution of the company.  If they experience corporate death, guess it is okay for them not to pay you a salary.   11:30:01 AM    comment []

© Copyright 2002 Daniel Dolinov. Last update: 10/1/2002; 12:33:57 PM.