Executive Compensation
Executive compensation is an important component of incentivizing highly skilled top-level executives. We have special expertise in representing executives in negotiations and disputes involving their compensation.
Executive compensation is a term that refers broadly to the array of different types of compensation sometimes offered to upper management and other key employees. Apart from typically high base salaries, common examples of executive compensation include bonuses, commissions, qualified and non-qualified deferred compensation, stock and stock options, rich severance packages, and certain non-monetary perks.
When a relationship between a corporation and one of its key employees or founders ends, the reputations and intense feelings involved can lead to hardline disputes on compensation. Premier Litigators is experienced at handling executive compensation and related severance disputes involving executives, founders, and other key employees.
WHY HIRE CANTRELL ASTBURY KRANZ, P.A.
Cantrell Astbury Kranz, P.A. is an elite litigation boutique that has deep experience handling high-value executive compensation disputes, where reputations built over the course of decades are often also at stake. We represent both plaintiffs and defendants. When possible, we structure our fees in ways that ensure our clients know that we have real skin in the outcome. Our clients include c-suite executives, owners in business divorces, sales professionals, and other key employees for large and mid-sized companies.
We have substantial experience across most industries, including healthcare, investment funds, staffing/recruiting, hospitality, manufacturing, technology, financial services, insurance, and real estate.
WHAT WE HANDLE
The executive compensation dispute attorneys at Cantrell Astbury Kranz, P.A. regularly advise on and successfully resolve compensation disputes. Examples of the types of compensation disputes we are hired to handle are provided below.
Severance and “For Cause” Disputes
Cantrell Astbury Kranz, P.A. is very experienced at handling severance disputes, including disputes over “for cause” provisions, claw-back provisions, and similar provisions that allow a company to not pay compensation or require an employee to return compensation.
Most executive compensation disputes arise in connection with a voluntary or involuntary termination. Depending on the compensation package, an employer may be obligated to continue paying compensation, providing medical benefits, or providing other fringe benefits for a time.
Often, however, such obligations are conditioned on an employee complying with certain post-employment restrictive covenants or not being terminated “for cause.” Similarly, certain bonuses, such as hiring bonuses and retention bonuses, may be conditioned on an employee
continuing employment for a certain period of time.
Factual disputes and protecting reputations can cause intense disagreements over entitlement to
compensation following an executive’s termination. At Cantrell Astbury Kranz, P.A., we are at the forefront of successfully resolving high-stakes severance disputes.
Bonuses
Bonuses often comprise a significant portion of compensation packages for executives and other key employees. There are many types of bonuses, such as hiring bonuses, retention bonuses, and performance bonuses. Bonus pay can be in cash, equity, or a combination of both. Bonuses are often negotiated extensively, and the conditions of eligibility are critical to understanding
entitlement.
We have experience negotiating bonuses and successfully litigating entitlement to bonuses, including disputes that impact entitlement, such as “for cause” termination provisions and claw-back provisions. We are frequently called on by both companies and executives to handle these important disputes.
Stock
At Cantrell Astbury Kranz, P.A., we have successfully litigated numerous stock disputes, including those in the context of business divorces, wrongful termination claims, and valuations.
Equity is often a major component of executive compensation. While there are many types of equity offered to executives and other high-level employees, some common examples include:
- Stock Options. Stock options provide an employee a right to buy a set amount of company shares at a particular price and within a particular time frame. The price at which the employee can purchase the stock option is called the grant price and is typically the market price at the time the option is granted.
- Performance Stocks. Performance stocks are an incentive-based form of stock compensation that are offered to employees if certain targets are met.
- Restricted Stock. Restricted stock is company stock that is offered to employees as part of a vesting schedule. The vesting schedule provides incentive to the employee to remain with the company for a certain time period.
- Phantom Stock. So-called “phantom stock” is not actually stock. Rather, it is an agreement to pay an employee compensation that is tied to the value of company stock at some designated time in the future. By tying the compensation to the value of the company stock, the interests of the employee and company are more aligned.
Non-Qualified Deferred Compensation
Deferred compensation is income that an employee earns in one year but is not paid out until a specified later date. A vesting schedule is often applied to deferred compensation. A primary benefit of deferred compensation is tax deferral, given that the income is typically not taxed until the date it vests or is received. The deferred income may also accrue interest or dividends through investments before it is taxed.
As part of their compensation package, executives and other high-level employees are often offered non-qualified deferred compensation, which is not subject to the requirements of the Employee Requirement Income Security Act (ERISA), but is subject to Internal Revenue Code Section 409A. Unlike 401(k)s and other ERISA-regulated retirement plans, non-qualified deferred compensation plans can be accessed before retirement without penalties.
Commissions
The amount, timing, and entitlement to payment of commissions are generally provided in a written agreement, such as an employment agreement or compensation agreement. Verbal agreements to pay commissions are generally enforceable. Post-employment entitlement to commissions is often in dispute.
We know the laws concerning commissions, as well as the industry standards for amounts of commissions and any conditions to payment. We routinely provide commission and other
compensation guidance, as well as related litigation services to companies and executives. In addition to commission disputes with executives, we also handle commission disputes for sales professionals in the recruiting/staffing, real estate, and financial services industries.
What to Look for In an Executive Compensation Attorney?
When looking for an executive compensation lawyer, you should compare the background of the attorneys you are considering. Factors should include subject matter expertise, educational background, past results, and what references say. We are glad to share references.
We handle all forms of employment litigation, including those relating to executive pay. We handle these disputes throughout Florida and Georgia. For a free consultation, contact us at (877) 858-6868 or coordinator@caklegal.com.