Employment

Executive Jobs: Executive Employment Contracts

The competition between companies looking to hire talented executives is becoming fierce making the need for executive employment contracts critical. Executive employment contracts are agreements between the employer and employee stating exactly what kind of compensation the employee shall receive upon employment. Everything from stock option to tenure is stated in the contract.

Historically there was never such a great need for the implementation of executive employment contracts. With little more than a handshake and a good luck sign, the fates of top-executives were sealed. In recent years, however, with the growing popularity of acquisitions and mergers, job security is becoming more and more a phenomenon. That is where executive employment contracts come in.

A legally binding agreement will provide employees with peace of mind knowing that if they are laid off, they will be provided for with severance pay, stock options or other agreed upon compensation packages. The same goes for the employer; knowing that an agreement has been made will ensure the employer that employees will not moonlight or even switch jobs completely.

The Severity of Executive Employment Contracts
Executive employment contracts are legally binding; meaning that if one of the parties involved breaks it, there will be repercussions. On the other hand, if one or both of the parties is not happy with the contract, it can be reviewed and re-negotiated. Typically contracts are reviewed after a certain number of years to keep them up to date as well as competitive.