Charles A. Bruder and David T. Harmon, Members of the law firm Norris McLaughlin, P.A., and Co-Chairs of the firm’s Executive Compensation and Employee Benefits Group, will present the webinar “Utilizing Settlement and Severance Packages” in conjunction with Lorman Education Services on Tuesday, March 21, from 1-2:30pm. » Read More
The next critical step to take in the negotiation of an employment package is:
The Termination Scenarios. Defining the circumstances under which the employment relationship can be terminated is essential. Considerable attention should be paid to the definitions of “cause” and “good reason.” Not focusing on the details of the definitions can have costly ramifications.
What a deal!! Duke Energy inks an employment agreement with CEO (a deal that was contemplated in its merger agreement with Progress Energy) and one week later, he is terminated. Under his severance arrangement, he is slated to receive severance payments in the neighborhood of $44 million, including severance, cash bonus, special lump-sum payment, and accelerated vesting of his stock awards (see “Behind Duke’s CEO-for-a-Day,” Wall Street Journal, page B6, Friday, July 6, 2012). » Read More
The compensation package of Eugene Isenberg, former CEO and now chairman of Nabors Industries, Ltd., including a proposed $100 million termination payment, illustrates the far extreme of executive compensation. While institutional shareholders brought suit to challenge his compensation, wasn’t there due diligence before investments were made? » Read More
Wall Street compensation does not appear to be the only target these days as foundations are coming under increased scrutiny. Handsome severance packages have been provided within the four corners of executive employment agreements. The Wall Street Journal reports such is the case at the National September 11 Memorial and Museum. » Read More
The jury’s decision in favor of Donald Drapkin, former employee of MacAndrews and Forbes, highlights the nuances of contract language – distinctions between substantial performance and material breach. To avoid cases like these, why not allow for a reasonable period within which to return company property, and not penalize the employee if items are discovered months if not years after the severance has been paid, provided good faith can be shown on the employee’s part. » Read More
What does the dispute between MacAndrews & Forbes and Donald Drapkin, its former Vice Chairman, indicate to other executives who sign severance agreements? That company property should be returned and confirmation of such return should be obtained by the executive, that companies should have solid procedures in place to monitor the possession of confidential information by employees, and that post-employment obligations are enforceable — depending on how they are drafted and the particular facts of the case. » Read More