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Developing a strong executive contract

On Behalf of | Oct 8, 2022 | Executive Employment

An executive employment contract should entail the most robust benefits you can negotiate, factoring in your potential, knowledge, skills, experience, education, and experience. The negotiation should compensate you fairly, solidifying your future with the company.

Many high-level executives accept monetary compensation below their professional worth or substantially limit their benefits by signing a subpar contract. Regardless of the company and position, an employer will always encourage a contract that is in the best interest of the company, not necessarily the employee. Oftentimes, this approach uses a one-size-fits-all strategy, using internal standards to base everything from salary to bonuses and golden parachutes to their advantage.

When to negotiate

Getting that offer will be exciting. Not wanting to rock that boat is going to cross your mind. But negotiating contract terms can make or break how you feel about the new position. That’s why talking about compensation, stock options, retirement, bonus, incentives, tax gross-ups, triggers, severance, and other terms should begin before an offer is made.

Important elements of the negotiation

Whether taking on a C-level or senior executive position, cover the following areas to secure financial compensation and benefits that protect your future.

Signing bonus

The signing bonus is a key way of demonstrating how vital you are to the new employer. It compensates you for taking the risk of joining the team and leaving your old employer. 


A stake in the company should be sufficient to justify the move. Stock, restricted stock units, options, and equity, like profit interests, and phantom stock, must meet or exceed industry standards. Consider tax-favored equity to boost take-home pay. For high-value equity, options are best. Stock is ideal when considering low-value equity.

Understanding your position

A new executive has to establish their authority and visibility. Confirm board or officer positions and understand performance targets and responsibilities, reporting structures, and organizational authority. It is important to know these elements right away.

Negotiating your executive contract in a way that supports your professional and financial goals will solidify a sense of security and loyalty when moving into a new role. Research standards within your industry to gauge what your value is before you enter into talks with a potential employer. Along with NDAs, non-competes, and severance terms, your executive contract is an essential commitment from an employer that should account for the value and expertise you will bring to the position.