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Employment Contract Considerations
Employment contract is a way to reduce risk when changing jobs
When going to work for a competitor or a troubled company then there are some financial considerations that have to be taken into account. First and foremost assume the job will only last a year and that you will need to look for another position while you are out of work. Given that assumption an employment contract is a must.
Employment contract
The employment contract has everything spelled out including grounds for termination, payments, insurance coverage, re-location (if you move), out placement services, and what can be disclosed. Attorney’s fees should be covered, in additionyou should retain the right to select the attorney to be used.
Signing bonus
Bonus should cover lost benefits at current place of employment such as vesting and unpaid bonuses. In addition there should be some amount for the “risk” taken for leaving a “sure thing” and going to a competitor or a troubled company.
Relocation Expenses
Expense should include cost differential if you are moving from a low cost housing market to a high cost market. Moving travel expenses, broker commissions, pre-payment penalties, interest rate differentials and moving expenses for all items such as extra cars, boats, RVs etc.
Performance Bonus
Bonus should have two components short term 12 to 18 months and long term 3 to 5 years.
Termination & Compensation
The contract should cover what will be paid by whom and when. For example if you were moved will they move you back, will they pay for outplacement, status of your bonus, recommendations, and insurance coverage after termination.
Changing jobs is risky business. Janco Associates, Inc. can help you in the process. We can act as your agents to help you negotiate your contract or advise you on what you have been offered.
