The contract of employment (for senior jobs sometimes also referred to as the service agreement) is the basis for all employment relationships. When accepting a new job, particularly at a senior level, it is unwise to assume that the contract wording is standard and cannot be negotiated.
Crucial terms to look out for in an executive service agreement include:
- Pay (obviously), but also additional forms of remuneration such as bonuses, LTIPs, share options and restricted stock schemes. What conditions are attached and how are decisions made? What would happen on termination of employment before such awards have vested?
- Benefits – such as car (or car allowance) life insurance, health insurance, critical illness cover, pensions
- Notice periods and other termination-related provisions
- Post termination restrictions and garden leave clauses – how long could you be kept out of the market?
- Duties, responsibilities and reporting line – are these in line with your expectations? Are you expecting to be on the Board and if so is that properly reflected in the agreement?
- Conflict of interest provisions – if you are engaged (or potentially engaged) in other business or organisational activities (even without remuneration) , or have investments in other businesses, be clear from the start as to whether you will need to declare them and/or obtain consent to continue or initiate them.
Our work for executives in this area includes:
- Reviewing proposed service agreements and drafting and negotiating changes, aimed at ensuring that the terms are favourable and reflect your expectations
- Advising on the implementation of changes to service agreements, for example as a result of promotion or restructuring of the organisation
- Advising on the application and enforcement of key contractual terms.
- Acting for executives in all contract-related claims in the Courts and Tribunals.