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VOLUME 1, ISSUE 8
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TOP TIPS
Your Employment Agreement
Identify areas that are most important-- in advance. Overall agreements are usually made up of mini-negotiations, so prioritize what you need to have versus what's nice to have. Factors in your analysis: salary, stock options, bonuses, benefits, relocation expenses, nondisclosure/noncompete/ nonsolicitation agreements, and severance.
Focus on defining title, role, and responsibilities. Understand the employer's expectations, performance criteria, and your reporting relationships. In the event of an acquisition, you want to ensure that your role will not materially change; if it does, you want the ability to exercise your exit or severance clause. More...
PRODUCT REVIEW
You know potential employers will be calling, but do you know what your references will say?
A solid reference can hasten your offer, but a poor or even lukewarm statement could lead to a lower compensation offer or the loss of the opportunity altogether. Think about how your bosses, past or present, would respond to these questions:
Personalized Reference Checking
Get your references checked, confidentially and professionally. Be confident your past employers are helping, not hurting, your candidacy.
More...
© 2005 Kennedy Information, Inc., a BNA Company.
NEGOTIATE FOR SEVERANCE BEFORE IT HAPPENS
What happens if you join a company as the Vice President of Marketing, and 6 months later there is a significant change in management or ownership, which results in material changes to your position? These are the types of situations that make it critical to negotiate a severance package in advance. Severance packages are designed to protect you in case you are terminated, as well as in the event your job due to circumstances you can't control.
Without a written agreement, severance is usually provided at the discretion of the employer. Often, severance is only provided if the employee agrees to release the company from any claim that the employee may have against the employer related to the employment relationship. As an at-will employee, if you haven't addressed your severance prior to joining the company, you will have limited rights to severance in most jurisdictions.
Although Jordan's performance had been stellar, he was among those let go. Jordan had not asked for a severance package when he was hired. The company offered 2 weeks severance and 1 month continuation of his company-paid health benefits. In addition, Jordan had to forfeit his entire stock options package, since he had not been with the company long enough for any vesting. Jordan tried to negotiate a longer severance package once he received his notice, but at that stage, he had little leverage. After several back-and-forth discussions, the company agreed to provide Jordan an additional 2 weeks' severance. This meant Jordan, a senior manager, now had a total of 1 month's financial support while he looked for a commensurate position.
Negotiating for severance often feels like planning your own funeral. But by being clear about severance at the outset of the employment relationship, you will be able to focus on the job at hand, rather than worrying about downsizing. Remember this motto with severance: If you ask, you may well receive. If you don't ask, you certainly won't.
Before you engage in your severance discussion, determine what is important to you with respect to the overall terms and conditions of your severance package. Give yourself enough time, so that in the event that you are terminated, you'll be able to find a new job at your current or higher level. Consider your monthly expenses; be sure you understand what will happen with your stock options; determine whether you are receiving any benefits as an employee that you would need to have continued if you are terminated. Calculate your living expenses on paper; make a list of other key issues you need to resolve if this clause is exercised due to change in management or because you are terminated.
When considering the role of severance in a new employment offer:
Example: Jordan Baker accepted a position as senior vice president for BleedingEdge Software, a medium-sized technology company. Before joining the company, he negotiated a competitive salary, excellent benefits, and a generous stock options package. The company performed well during his first 8 months with them; however, due to external economic factors, BleedingEdge's third round of funding did not come through. The board of directors imposed an immediate 30% reduction of staff, and the most recently hired senior management staff were among the first to be laid off.
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