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CEOs and C-level executives face high-stakes negotiations over terms of employment, executive compensation, executive equity, and severance. This article shows how hiring the right executive employment lawyer can pay off for you … often dramatically.
While many executives are savvy dealmakers for their companies, negotiating for themselves can be another matter. Too often, they leave money on the table, accept vague or unfavorable terms, or miss opportunities to protect their legacy and future income. Despite having lots of experience in your industry and the needs of your company to succeed, do you similarly have great experience with your own contractual needs?
Even if you change companies or face high stakes executive contract negotiations five or more times in a decade, you are still dealing with these negotiations on an infrequent basis. By contrast, an experienced executive employment attorney faces these high stakes negotiations, aiding CEOs and C-level executives, five or more times each and every month, with scores of new clients each year. Clearly, the right attorney can bring much valuable advice and help to your employment contract negotiations.
How to Identify the Right Attorney
Perhaps you’ve avoided hiring an executive employment attorney in the past—whether due to a poor experience with the wrong attorney, or negative stories from colleagues. But in truth, hiring the right executive employment attorney is a no-lose situation. It can only help you. To find the right attorney, you should look for the following:
- Specialist – Hire a specialist. If the executive employment attorney needs to do a conflict check because he or she represents companies and employers, that’s not a good sign. Most employment / labor attorneys, especially those in medium to large law firms, represent both executives and employers in their practice, and that tends to be many more companies than executives. As a result, their mindset leans toward the company viewpoint even when they are representing you.
- Skill set – Hire an attorney with the full required skillset. This includes not only knowledge of employment, contract and corporate law, but also tax law. Sometimes tax law issues arise suddenly, often as opportunities for favorable tax structuring. Your attorney needs to be a tax law expert to spot opportunities for your benefit – to raise issues in negotiations even if you don’t win the point but get concessions because the other side acknowledges the tax issue raised.
- Experience – Hire an attorney who represents a wide array of executive clients, not just CEOs but other C-level executives, and not just in your industry but in a broad spectrum of industries. This broad experience enables the attorney to draw from lessons learned in different representations and apply them to your case. The right executive employment attorney is not just someone who only edits and comments on terms offered to you, but one who can read what is NOT on the page. That attorney can tell you what is missing. He or she can tell you, “Here are things I have done for other clients like you that I don’t see in your contract and I want to introduce them in these negotiations for you – things you ought to seek, whether or not we eventually get them all.”
- Wide Focus – Hire an attorney who is not just in this for the buck. Do not hire an attorney whose sole focus is the amount of your salary or bonus. There is much more to effective executive representation than just the dollars on your pay stub. The focus should be wide – yes, your compensation, yes, your bonus and equity terms too, but also key protections to assure this will be the right position for you, to assure the company fulfills promises to you and to assure your career advancement is not jeopardized.
- Humility – Hire an attorney who respects you as client, understands your needs, is transparent with you and carries out your decisions. The right attorney will not hesitate to give you bad news, for example, that the contract is against your interest. He or she will not hesitate to fulfill your needs and will do his or her best to never blow your deal. Even if he or she considers it a bad deal for you, the right attorney will do his or her best to keep the deal alive protecting you to the extent possible. The right attorney will also willingly play the “bad cop” so that if the other side is unhappy, it is your attorney’s fault and not yours.
Examples of the Kind of Gains You Can Achieve
In many cases, the value of benefits gained far exceeds the comparatively modest legal fees. This can occur throughout your career — whether accepting a new position, negotiating contract renewals and equity restructurings to severance packages and post-termination protections, or navigating a change of control, facing “constructive termination” or preparing for a dignified exit, the right executive employment attorney can add immense value. Drawing from my own client successes, here are examples of the various types of meaningful gains clients have derived.
- Job Offers / Employment Contracts – In executive employment agreement negotiations, I seek out what motivates the client to take the position. In many cases, I have inserted such terms into the offer letter or contract so that when the employer could not fulfill the promise made, my client would be in a position to negotiate for a correction or substitution or to trigger severance. I also seek out the executive title, duties and responsibilities in contract that would look good on LinkedIn and best position my client to get his or her next position.
- Executive Equity – In executive equity negotiations, I don’t necessarily look at the number of shares or options but rather the aggregate value or strike price to assure the equity offered is commensurate with my client’s position. So, if the company succeeds with 2x or 3x growth, the value of the equity will be significant. I also focus on equity terms and structure – this often includes suggestions to “re-cast” the same amount of equity – suggesting a form that would best benefit my client from his or her tax position.
- Severance Protections – For executive severance terms, I seek two areas of protection: triggers and benefits. For triggers, because you lose severance if you are terminated for cause, so the cause must be material and egregious, and notice needs to given with cure allowed. On the other hand, if the company violates its promises to you in a material way, you can give notice, and if not cured, you can trigger severance. The severance benefits need to be robust to deter violation of the agreement. Those benefits should embrace salary, bonus and equity.
- Wrongful Termination – Almost all executives are employees at will. You can be terminated for good reason or no reason, but you cannot be terminated with impunity for the wrong reason. Even an employee at will with no severance rights in your job offer, you might still seek compensation if your termination violated law including age, gender, race or national origin discrimination or retaliation. Besides those, I have also had success under various recognized legal claims including promissory estoppel / detrimental reliance, good faith and fair dealing and even unjust enrichment. We try not to go to court and instead gain the concession by demand letter. But on occasion, I, with my team, have brought litigation on a contingency basis with success.
- Change of Control – When the company is “in play,” it can be a risky time for a C-level executive. If your company is acquired, you may well lose your position and also significant compensation and equity. In such circumstances, I work with the client to determine the points of leverage you may have and then, if circumstances are right, to negotiate a retention agreement or retention terms. Thus, if you are loyally staying on, aiding the company to achieve the desired exit terms, then when that change of control does occur, there would be a fair payoff for you as well.
Financial Value of the Gains You May Achieve
This article has just described five areas from my own law practice, where the right executive employment attorney was able in each case to achieve material and meaningful gains for the CEO and other C-level clients.
Now you may ask – what numbers are we talking about? How much money did you make for the client? To this, I give a lawyer’s answer: it depends.
For example, let’s look at two CEOs who are seeking counsel on negotiations over a job offer. The right attorney will have questions for these prospective clients regarding the amount of money at stake. He found out that Client Jones has been out of work 6 months and is offered $200,000 base, 20% target bonus and no equity. Client Smith is being recruited away from a lucrative rising position with an offer of $400,000 base, 50% target bonus, and equity that he hopes will be worth $2 million.
The right executive employment attorney might offer pointers to Jones and direct him or her to the Bar Association but decline the representation. But he or she would accept Smith as client. The right attorney would want to seek key protection since Smith is giving up a lucrative job. If he or she is misled in the negotiations, that could be a $500,000 claim or more. The attorney will also be all over the terms of the equity. If it truly comes to be worth $2 million, the right attorney might potentially save Smith as much as $800,000 in taxation alone, and at the same time preserve the client’s right to the $2 million against nasty terms that might otherwise be inserted.
What If the Company Won’t Budge
There are occasions when the company won’t budge. “It’s our way or the highway.” Again, if you have hired the right executive employment attorney, he or she will present the changes you seek as in the interest of the company as well. You never want to appear unreasonable – your asks and the support for them need to be grounded in logic, reason and fairness.
This is true in a job offer and employment terms, in severance negotiations after employment termination or in connection with “constructive termination” where you are being forced out, in negotiations over equity, phantom stock, or negotiations over a non-compete or retention in a change of control.
The right executive employment attorney will be prepared if the other side won’t budge and offer strategies for your response. If you really want and need that job, the strategy may be to swallow the terms right now and save the fight for a future time when your bargaining position is stronger.
If your bargaining position is strong and the company is arrogant and resents being challenged – “How dare you ask for such things, we just don’t do it that way.” – then it may be wise to take a pass. In these situations, I would advise, “If this is how the company is acting when they are courting you, what’s it going to be like when they own you.” More than once, my clients have told me their fees on me were well spent because our careful, reasonable negotiations have uncovered an unreasonable employer, and the clients’ response was “I dodged a bullet.”
The Right Attorney “Pays for Himself or Herself” – Literally
In most cases, the cost of legal representation was between 1% to 5% of the financial improvements achieved. Imagine paying a fee of $10,000 to $20,000 and receiving over $1 million gain from equity renegotiation and severance terms. That’s not just ROI—it’s career-altering ROI.
Navigating executive employment contracts can be one of the most complex and high-stakes challenges for C-level executives. These agreements encompass everything from compensation packages to restrictive covenants, and even minor oversights can lead to significant financial or professional consequences. Partnering with the right executive employment lawyer can help you maximize your total compensation and secure contract terms that protect your long-term interests.
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