Executive Employment Agreements

An executive employment agreement is the single most important document defining your professional relationship with an organization. It is not merely a formality but the constitutional charter of your career, a legally binding instrument that dictates the terms of your engagement, compensation, responsibilities, and, critically, your exit. For a senior executive, founder, or highly compensated professional, entering into an employment relationship without a meticulously negotiated agreement is a significant strategic error. It cedes control over your career and financial future to the discretion of your employer. At Mailly Law, we specialize in architecting these complex agreements, transforming them from standard-issue corporate documents into powerful instruments of career protection and wealth creation. We understand that this document is a negotiation between two sophisticated parties, and we ensure our clients enter that negotiation from a position of maximum strength and foresight.

The stakes involved in an executive employment agreement are immense. A poorly drafted contract can leave you vulnerable to arbitrary termination, deprived of bonuses you earned, and subject to restrictive covenants that cripple your ability to work elsewhere. Key terms like the definition of “Cause” for termination can be drafted so broadly by a company that virtually any subjective dissatisfaction could be used to deny you severance. Equity grants can be structured to vanish upon termination, even if you were instrumental in creating the value they represent. Responsibilities can be vaguely defined, allowing for a “constructive termination” where your role is diminished to the point of being untenable, yet you have no contractual recourse. We see these pitfalls daily and have built our practice on helping executives avoid them.

Our approach to negotiating executive employment agreements is forensic, strategic, and relentlessly focused on our client’s long-term interests. We deconstruct every clause and provision to analyze its implications, both immediate and contingent. Our representation includes:

• Comprehensive Compensation Analysis: We go far beyond base salary. We scrutinize and negotiate every component of your financial package, including signing bonuses, performance-based annual bonuses (with clear, objective metrics), long-term incentive plans (LTIPs), deferred compensation, and phantom stock plans. We ensure bonus criteria are achievable and not subject to arbitrary board discretion.
• Equity Negotiation and Structuring: For most executives, equity (stock options, Restricted Stock Units (RSUs), etc.) is the most significant component of their compensation. We are experts in negotiating the terms of these grants. This includes fighting for larger grant sizes, favorable vesting schedules (e.g., four-year vest with a one-year cliff), and, crucially, “acceleration” provisions. We advocate for “double-trigger” acceleration, where your equity vests immediately if you are terminated without Cause following a “Change in Control” (like a merger or acquisition), and in some cases, “single-trigger” acceleration upon a change of control.
• Defining Termination with Precision: This is a critical battleground. We aggressively negotiate the definition of “Cause,” narrowing it to specific, severe acts of misconduct (e.g., conviction of a felony, embezzlement) rather than vague, subjective standards like “failure to perform duties to the satisfaction of the Board.” This single negotiation point is often the difference between a multi-million dollar severance package and walking away with nothing.
• Securing Robust Severance Provisions:We embed a strong severance agreement directly into the employment contract. This pre-negotiates your exit package, guaranteeing a certain multiple of your salary and bonus, continued health benefits (COBRA) paid by the company, and fair treatment of your equity upon a “Without Cause” termination.
• Delineating Roles, Responsibilities, and “Good Reason”: We insist on clear definitions of your title, duties, and reporting structure. Furthermore, we negotiate strong “Good Reason” resignation clauses. This allows you to resign and still receive full severance benefits if the company unilaterally demotes you, reduces your pay, relocates your office, or fundamentally alters your responsibilities. It is a vital check on the company’s power.
• Managing Restrictive Covenants:We carefully review and negotiate non-compete, non-solicitation, and non-disclosure clauses to ensure they are reasonable and do not unduly restrict your future career prospects.

At Mailly Law, we don’t just review contracts; we build career fortresses. We understand the nuances of corporate governance, the pressures of the C-suite, and the complex interplay between contract law and executive compensation. We represent C-level executives, senior vice presidents, founders, and other key professionals who understand that investing in expert legal counsel at the outset is the most effective way to secure their professional and financial destiny