Navigating the executive journey: Top tips for entering a new senior role
Stepping into a new senior or C-suite role is a significant milestone in any executive's career. However, the terms that apply can have a substantial impact on your future. Here are our top tips that every executive should keep in mind before signing on the dotted line...
1. Don’t forget to negotiate
It can be easy to assume that an employer won’t deviate from their standard contractual terms. However, our experience shows that many employers are receptive to negotiation, particularly where it’s been a long recruitment journey and where the appointment is a senior one. This often creates leverage for you to push for positive improvements. The outset, before your employment commences, is usually the best time negotiate.
Remember that this is usually the start of what you hope will be a positive relationship, so read the small print, but don’t get bogged down in debating minor points. Prioritise what is most important to you. We frequently advise senior individuals on how to approach these negotiations, and where to focus your efforts.
2. Restrictive covenants
Restrictive covenants are clauses that limit your activities after an employment contract ends, such as prohibiting you from working for a competitor for a specified period or from dealing with clients or prospects.
Carefully review any contractual obligations with your previous employer (both in your employment contract, but also in any other documentation for example in shareholders agreements if relevant) to ensure you are free to take up a new position.
It is a common misconception that restrictive covenants are unenforceable. While some do fail, well-drafted restrictions that protect key business interests are often upheld by the courts. Breaching restrictive covenants can place you and your new employer at significant risk of time consuming and costly legal disputes. If you have concerns about restrictions impacting your new role, seek advice early to understand your position.
Also, examine the duration and scope of any restrictions in your new contract that could impact your career mobility post-employment. Consider whether any exceptions or limitations can be negotiated. Legal advice can help you understand these covenants and make informed decisions about your long-term career.
3. Pay and benefits
Carefully review the terms related to compensation in your new contract. Ensure the headline salary meets your expectations and consider the timing of your exit from your previous role means you are missing out on a bonus, whether there is scope to negotiate higher pay or some form of signing on bonus
Check when your first salary review will be, and how frequently salaries are reviewed. Look too at benefits such as life insurance, sick pay, permanent health insurance, pension and policies on family leave. You need to be comfortable that they match your expectations and seniority.
Pay attention to provisions relating to bonus, incentives and other forms of deferred remuneration. Whilst ideally you will want as much detail as possible in your contract, the document will frequently refer off to other bonus schemes, stock option plans, or other incentive scheme rules. These rules can contain strict conditions, discretions, vesting schedules, and provisions covering what will happen if you leave for different reasons part way through a payment or vesting period. Request copies of any separate rules that will have an impact your rewards.
We can help you assess your risks related to these elements, and ensure your compensation package aligns with your expectations.
4. Notice and probation periods
Check if you will subject to a probation period, and the notice period that applies during probation. Many probation clauses provide for the relationship to be terminated on very short notice within this period, leaving employees financially exposed before they have accrued unfair dismissal protection (which is still subject to a 2 year qualifying period).
Consider the notice periods that will apply on both sides after probation. A long notice period can provide financial comfort, but if you prefer the flexibility to change roles swiftly, a shorter period of notice may be better for you.
5. Outside Interests
An outside interest clause will typically address any activities, investments or roles you might have outside of your employment that could conflict with your new duties. It may be a requirement for you to fully disclose any existing commitments or interests to avoid being in breach.
6. Entire Agreement Clause
This type of clause typically states that the contract represents that complete and final agreement between the parties, superseding all prior discussions, negotiations and agreements. Be mindful that verbal promises or informal agreements made during the hiring process will not be legally binding unless expressly and included in your written contract. Ensure your expectations are covered within the contract to avoid misunderstanding or future dispute.
This is a non-exhaustive list of tips. At Freeths we have extensive experience advising directors and senior executives considering new terms. If we can assist you in understanding and negotiating your terms, please get in touch with us.
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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