Executive compensation packages are a hot topic of discussion in the world of business today. There are many different aspects to take into account when designing a compensation package for executives. From the perspective of the company, it is important to protect against any litigation in case the working relationship turns bad. Here are several things to keep in mind when designing an executive compensation package for employees.
Bonuses are a great incentive for employees to go the extra mile with their work. There are many companies that offer bonuses that are equivalent to ten or twenty thousand dollars a year. Any company that offers incentive bonuses based on performance needs to make sure that they cover every angle when describing what must take place to earn a bonus. If this does not occur, a company can open themselves up for litigation in the event that the bonus is not paid out like the employee expects.
A non compete agreement is a common clause in many contracts. This basically is a period of time when an employee cannot leave the company to go work for a competitor. Although it sounds very restrictive, it is common in almost every business industry. Many companies share business secrets and strategy with employees, and this makes it dangerous to a company if an employee goes to work for a competitor. There have been many lawsuits in the business world over past employees sharing confidential information. Be sure to be very specific about any non compete agreements in the employee contract.
One of the best ways to sweeten an employee contract deal is to add more vacation time to the compensation package. Many high ranking employees with expect to have at least three to four weeks of vacation time when they sign on. There are even some companies that are moving towards a business model where employees are free to take vacation days whenever they want. It is important to be specific about the expectations of employees concerning their vacation time. Some companies expect that employees will continue to work remotely even after they are on vacation.
Overall, compensation packages are an important part of running a successful business. A company should have specific information that protects them from any litigation when it comes to their compensation packages. This can help to prevent a lot of issues down the road from upset employees. Contact Goldman & Ehrlich today to learn more.