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Saturday, September 17, 2022

Stock Rights That Protect the Value of Your Executive Equity Compensation


On Thursday September 1, 2022, 2022, CEOWorld magazine published an article I wrote on “Stock Rights That Protect the Value of Your Executive Equity Compensation.”

This new article is designed for CEOs, C-level and senior executives, who have recently received a job offer or expect to receive a job offer and will be negotiating terms of executive compensation which will include executive equity. 

In those negotiations, executive equity is often a very significant and often a major part of the executive compensation and a often a driver to accept a job offer.  This is so because executive equity offers the prospect of greater financial upside value than from your fairly fixed and limited cash compensation.  This special upside potential for executive equity arises from three different factors: (a)  Appreciation – with your service the stock price or value might rise significantly, (b) Liquidity Event – a potential acquisition or an IPO  might also significantly increase value, (c) Favorable Taxation – with appropriate structuring, appreciated equity on cash out may be taxed at a much lower rate than cash compensation for much greater take home pay. 

Thus, given the high importance of equity in the CEO’s or C-level executive’s compensation package the focus of my article then moves to discuss these five (5) critical areas of stock rights and terms you want to be sure to give proper attention in your negotiations to give you the best chance to achieve the potential value from the equity you are granted: 

  • Meaningful Level of Equity – to be sure that sufficient equity is granted so that if success is achieved, it will be impactful for you,
  • Tax Favorable Structure – negotiation over the form of your equity at the outset is quite important because in tax law – “form is substance” – different forms produce very different tax results and you want tax-favored equity if possible,
  • Severance Protection – if midway through the buildup you are forced out, you want your severance buy-out to embrace your equity as well as less important cash components of your comp package,
  • True Up Adjustment – especially if you are brought in to secure a financing raise, you don’t want to be a victim of your own success and seeking a level anti-dilution protection is a fair ask,
  • Cash-out protections – if after a number of years, no liquidity event is on the horizon, it is helpful to have a put option with the company to assure at some point you can tap into the value you achieved.

To see my full CEOWORLD magazine. article, go to LINK: https://ceoworld.biz/2022/09/01/stock-rights-that-protect-the-value-of-your-executive-equity-compensation/

Or on my website at https://www.executiveemploymentattorney.com/stock-rights-that-protect-the-value-of-your-executive-equity-compensation/

This was my 38th article published in CEOWORLD since 2016.  Previously, the editor advised that I can use “Featured in the CEOWORLD magazine” and the CEOWORLD “Logo” on my website and add CEOWORLD magazine in my LinkedIn profile’s “Experience Section” as an “Opinion Columnist.” and authority in the field.  

On its own initiative, CEOWORLD magazine created on their website a library of Robert Adelson published articles.   You can peruse this library and/or read as many of my 38 published articles as you wish.  See https://ceoworld.biz/author/robert-adelson/

CEOworld Magazine logo

With more than 12.4+ million-page views, CEOWORLD magazine is the world’s leading business magazine written strictly for CEOs, CFOs, CIOs, senior management executives, business leaders, and high net worth individuals worldwide. https://www.linkedin.com/company/ceomagazine/

Thursday, August 18, 2022

Executive Sign on Bonus, Retention Bonus and Other Bonuses – Terms and Negotiations


On August 4, 2022, the executive career advancement website IvyExec  published an article I wrote on “Executive Sign on Bonus, Retention Bonus and Other Bonuses – Terms and Negotiations.”

This new article is designed not only for C-level and senior executives, but even for many directors and mid-level executives who when negotiating a new executive job offer or employment contract need to give equal and perhaps greater focus on the structure and terms of bonus as they do to base salary compensation.

My article discusses five (5) key bonus structures:

  • Sign-on bonus to make the executive whole for items given up,
  • Sign-on bonus to compensate for the risks in changing companies,
  • Guaranteed bonus,
  • Performance bonus based on company achievement,
  • Performance bonus based on individual achievement.

The article also suggests other important issues in the determination, calculation and payout of the bonus.

My article also discusses a retention bonus or stay bonus as a one-time payment or a one-time retention agreement for considerations for the executive to commit to staying with the company for a set period of time or through to a planned event (for example, an acquisition).

To see my full IvyExec  career advancement website article, go to LINK:  https://www.ivyexec.com/career-advice/2022/executive-sign-on-bonus-retention-bonus-and-other-bonuses-terms-and-negotiations/ 

Or on my website at  https://www.executiveemploymentattorney.com/executive-sign-on-bonus-retention-bonus-and-other-bonuses-terms-and-negotiations/

IvyExec hosts articles and webinars from experts in the career, leadership, and business spaces who wish to share their knowledge with our audience.  In April 2021, I was invited to write for IvyExec since it seeks original content on the topics of career development, leadership, and business strategy as it applies to senior-level and C-Suite professionals.  IvyExec blog posts and webinars are shared with its community of more than 2 million members on its website, in its newsletter, and on its social media channels.  https://www.ivyexec.com/career-advice/write-for-us/

IvyExec claims a “Community of 2.5M+ Leaders”.

It is my hope that this article will be helpful to CEOs and other senior executives who are considering or re-visiting the executive compensation piece of a job offer or employment contract and need to focus on bonus structure and terms every bit as much as base salary. If you or any colleague of yours has a need in this area, please do reach out to me at rob@attorneyadelson.com.


Thursday, July 14, 2022

Building & Keeping Your Executive Team: How to Recruit and Retain Senior Executives for Your Startup or Early Stage Company

This presentation was given eight weeks ago on May 17, 2022, for the Boston Entrepreneurs’ Network (ENET), where I was one of three invited speakers for the ENET’s webinar that evening on the topic “Recruiting Board Members and Senior Executives”.

As I explained to the ENET audience that night, since 2016, my law work has increasingly focused on executive representations, negotiations over job offers, employment terms, equity, executive compensation, separation and severance, for C-level and senior executive clients.

Today, more than 95% of my law work and 98% of all new law work consists of those representations. 

But on occasion, a company will hire me.

Why would a company do that?  Why would a company hire an attorney known to be one so focused on representing the interest of executives?

The reason:   The company is  having difficulty recruiting an A-level senior executive.  They cannot pay top dollar and are willing to try something different to recruit that ideal man or woman to fill the pressing need in their organization.

So … in that time of pressing need, the company hires me, as one who knows what executives seek to help the company “think out of the box” – to devise a strategy and prepare documents to get the best executive at the least cost and within the company budget.   For a startup or  early stage company, it is executive recruitment on a shoestring.

In my work representing companies, my slogan is “Appear Generous.  Demand Performance.”  The strategy I develop and then the documents I prepare are radically different then most executive employment and equity documents.  My documents do appear to be fair …even generous.  And in recruitment, I help the company with its “sell” – telling executives, “Even at less base pay you will come out ahead with our package.  And what’s more, this package reflects a culture where you will be valued and respected.”

But we still demand performance.  My documents are still employment “at-will” and I make sure that a company can readily terminate a non-performer.  But what is different, is that my documents provide that if the executive does perform, he or she won’t be cheated out of what they earned.   Sadly, that element of basic fairness, is often so rare in today’s corporate America.

In my presentation and slides, I discuss such issues as

Between the revolutionary terms I suggest,  and our explanation and “sell” to the executive recruit, I have had a high success rate.   Although we are often significantly outbid on the dollar figure, I often get my target man or woman for my company client.

For my slides for this presentation, LINK:  https://www.slideshare.net/RobertAdelson/building-keeping-your-executive-team-how-to-recruit-and-retain-senior-executives-for-your-startup-or-early-stage-company

To see and listen to the video of my 19-minute ENET presentation on executive recruitment from my website, LINK:  https://youtu.be/vCCJ5RO1blw

or access both my presentation slides and video recording on my website, LINK:   https://www.executiveemploymentattorney.com/building-keeping-your-executive-team-how-to-recruit-and-retain-senior-executives-for-your-startup-or-early-stage-company/   

It is my hope that this article will be of benefit to CEOs and Company founders who are having difficulty in recruiting a high caliber C-level and senior executive for a role key to growth, and might want to think out of the box….  Feel free to share these slides or this portion of my July 2022 Business Law Newsletter.  If you or any colleague of yours has a need in this area, please do reach out to me.

Friday, June 10, 2022

Executive Termination: If You’ve Been Fired or Face That, Do You Have a Claim for Wrongful Termination?

Ten days ago, on Friday May 27, 2022, the executive career advancement website IvyExec published an article I wrote on “Executive Termination: If You’ve Been Fired or Face That, Do You Have a Claim for Wrongful Termination?”

This new article is designed not only for C-level and senior executives, but even for many directors and mid-level executives. 

My article makes the point that most executive employment in the USA is “at will” employment.  That means you can be fired at any time for any reason or no reason.  However, you cannot be fired for the wrong reason.  If you are fired for the wrong reason, despite being an at-will employee, you may have a claim for wrongful termination.

What is wrongful termination?  My article mentions a number of things an employer can do that could give rise to a wrongful termination claim, including these:

  • Violating terms of an employee manual
  • Termination motivated by wrongful discrimination if you fit into a protected class – such as race, gender, age, national origin, sexual orientation.
  • Whistleblowing and retaliation.

In addition, you might potentially obtain damages if you quit employment over a hostile work environment or if conditions which have been made so difficult that you can claim constructive discharge.

After the discussion of potential claims, my article in its second part offers suggestions to you on what you might potentially seek in wrongful termination case or in settlement or severance negotiations with your employer

To see my full IvyExec  article, go to LINK: https://www.ivyexec.com/career-advice/2022/executive-termination-youve-been-fire-do-you-have-a-claim-for-wrongful-termination/

Or on my website at https://www.executiveemploymentattorney.com/executive-termination-if-youve-been-fired-or-face-that-do-you-have-a-claim-for-wrongful-termination/

IvyExec hosts articles and webinars from experts in the career, leadership, and business spaces who wish to share their knowledge with our audience.  In April 2021, I was invited to write for IvyExec since it seeks original content on the topics of career development, leadership, and business strategy as it applies to senior-level and C-Suite professionals.  IvyExec blog posts and webinars are shared with its community of more than 2 million members on its website, in its newsletter, and on its social media channels.  https://www.ivyexec.com/career-advice/write-for-us/

IvyExec claims a “Community of 2.5M+ Leaders”.

It is my hope that this article will be of benefit to  C-level and senior executives who have been fired or may face employment termination in situations where you might have a claim for severance based on various potential claims for wrongful termination if you have been fired or constructive discharge if you feel forced to resign…  Feel free to tweet or share this article. If you or any colleague of yours has a need in this area, please do reach out to me.

Thursday, May 5, 2022

Negotiating Favorable Executive Equity Terms in an LLC – Capital vs. Profit Interests

Two weeks ago, on Sunday April 20, 2022, CEOWorld magazine published an article I wrote on “Negotiating Favorable Executive Equity Terms in an LLC – Capital vs. Profit Interests”


This new article is designed for CEOs, C-level and senior executives, who receive a job offer from a limited liability company where LLC equity will comprise an important component of your executive compensation package. Most senior executives are familiar with executive stock and stock options, including ISOs and non-qualified option grants offered by corporation employers.  But how do you evaluate equity that is not stock or stock options? What issues should you be concerned about when your executive equity package is comprised of LLC “member units”, called profits interests or capital interests?  

This article will cover issues important to the executive when your equity compensation is units in an LLC, including
  • The difference in rights of the two kinds of LLC interests – profits interests and capital interests,
  • The difference in taxation of profits and capital interests,
  • The advantages that an LLC profits interest can offer over a corporation’s equity interest, whether stock or options, if significant equity appreciation is likely,
  • The importance of determination of profit interest threshold amount,  
  • Important protections to assure your share of the value appreciation if the LLC succeeds,
  • Other valuable protections to assure your right to a cash payout with others if the LLC succeeds.

My article concludes with discussion of key terms to watch for in the LLC operating agreement.  My article stresses the importance of negotiating in your own equity grant, job offer or employment contract that those key fixed Operating Agreements terms will be applied in a manner to assure your reasonable protections and the benefit of your bargain in accepting the job offer with this LLC.

To see my full CEOWORLD magazine. article, go to LINK:
https://ceoworld.biz/2022/04/20/negotiating-favorable-executive-equity-terms-in-an-llc-capital-vs-profit-interests/

Or on my website at https://www.executiveemploymentattorney.com/negotiating-favorable-executive-equity-terms-in-an-llc-capital-vs-profit-interests/

This was my 37th article published in CEOWORLD since 2016.  Previously, the editor advised that I can use “Featured in the CEOWORLD magazine” and the CEOWORLD “Logo” on my website and add CEOWORLD magazine in my LinkedIn profile’s “Experience Section” as an “Opinion Columnist.” and authority in the field.  

On its own initiative, CEOWORLD magazine created on their website a library of Robert Adelson published articles. You can peruse this library and/or read as many of my 37 published articles as you wish. See https://ceoworld.biz/author/robert-adelson/

With more than 12.4+ million-page views, CEOWORLD magazine is the world’s leading business magazine written strictly for CEOs, CFOs, CIOs, senior management executives, business leaders, and high net worth individuals worldwide.

https://www.linkedin.com/company/ceomagazine/

It is my hope that this article will be of benefit to CEOs, C-level and senior executives who, at some point in your career, are offered equity interests in an LLC and need to know what to watch out for also what opportunities LLC interests can offer. Feel free to tweet or share this article. If you or any colleague of yours has a need in this area, please do reach out to me at 617-875-8665.

Friday, April 15, 2022

Merits of RSUs vs Stock Options and Other Forms of Executive Equity Compensation

Eight days ago, on Monday March 30, 2022, the executive career advancement website IvyExec published an article I wrote on “Merits of RSUs vs Stock Options and Other Forms of Executive Equity Compensation.”

This new article is designed not only for C-level and senior executives, but even for many directors and mid-level executives. 

My article discusses a less well known form of executive equity RSUs – restricted stock units, including these subjects: 

  • What are RSUs?
  • How are RSUs different from the more common forms of executive equity, stock options and restricted stock?
  • How are RSUs taxed in ways different than stock options and restricted stock?
  • In what situations are RSUs an attractive executive equity choice? 
  • In what situations are other choices preferable for the executive?

To see my full IvyExec  article, go to LINK: https://www.ivyexec.com/career-advice/2022/merits-of-rsus-vs-stock-options-and-other-forms-of-executive-equity-compensation/

Or my website at https://www.executiveemploymentattorney.com/merits-of-rsus-vs-stock-options-and-other-forms-of-executive-equity-compensation/

IvyExec hosts articles and webinars from experts in the career, leadership, and business spaces who wish to share their knowledge with our audience.  In April 2021, I was invited to write for IvyExec since it seeks original content on the topics of career development, leadership, and business strategy as it applies to senior-level and C-Suite professionals.  IvyExec blog posts and webinars are shared with its community of more than 2 million members on its website, in its newsletter, and on its social media channels. https://www.ivyexec.com/career-advice/write-for-us/

IvyExec claims a “Community of 2.5M+ Leaders”.

It is my hope that this article will be of benefit to  C-level, senior and even lower level executives who are now or may in the future be negotiating over equity as part of their executive compensation and are not confident the stock price will rise and might even decline, and would like an alternative form of equity that can retain some value in cases where “underwater” stock options become worthless.


Thursday, March 3, 2022

Executive Relocation Risks, Mitigation Strategies and Terms to Seek in Your Relocation Package

On Sunday February 20, 2021, CEOWorld magazine published an article I wrote on “Executive Relocation Risks, Mitigation Strategies and Terms to Seek in Your Relocation Package.”


This new article is designed for CEOs, C-level and senior executives, who at some point are presented with an
 attractive career opportunity, where the new position is in a geographic location that is not near home, and would necessitate some form of relocation or adjustments away from working from your current location at or near your permanent residence. 

My article does not discourage relocation and points out many benefits that can arise, including career and professional benefits, if you are willing to relocate.  However, the article does not take this relocation issue lightly and raises the important issues that permanent relocation can pose to your spouse and family.  Furthermore, the article balances benefits with many professional risks you also face in relocation. 

Thus, at its core, the article generally advises caution and suggests use of a mitigation strategy with focus on temporary relocation that includes these key elements:  

  • Temporary Residence – with the company providing a suitable allowance for a furnished apartment or other residence,
  • Transportation – local car rental and air transportation to and from your permanent residence.
  • Commuting – allowance for sufficient periodic visits home,
  • Remote Service – allowance for services to be performed from a home office in or near your permanent residence,
  • Tax Structure or Gross-up – utilization of IRC Section 119 and other provisions of the tax code to structure temporary residence as company lodging so that it is non-taxable or otherwise providing you a tax gross-up, so you have zero net new taxes for company relocation.

My article concludes with discussion and listing of important executive contract terms to seek with your permanent relocation package if, after consideration and perhaps use of the mitigation strategy, you do determine that the position is long-term, or the new locale is advantageous or otherwise  the family decision in favor of permanent relocation.

To see my full CEOWorld magazine. article, go to LINK: https://ceoworld.biz/2022/02/20/executive-relocation-risks-mitigation-strategies-and-terms-to-seek-in-your-relocation-package/

Or on my website at https://www.executiveemploymentattorney.com/executive-relocation-risks-mitigation-strategies-and-terms-to-seek-in-your-relocation-package/

This was my 36th article published in CEOWORLD since 2016.  Previously, the editor advised that I can use “Featured in the CEOWORLD magazine” and the CEOWORLD “Logo” on my website and add CEOWORLD magazine in my LinkedIn profile’s “Experience Section” as an “Opinion Columnist.” and authority in the field.  

On its own initiative, CEOWOLRD magazine created on their website a library of Robert Adelson published articles.   You can peruse this library and/or read as many of my 36 published articles as you wish.  See https://ceoworld.biz/author/robert-adelson/

CEOworld Magazine logo

With more than 12.4+ million-page views, CEOWORLD magazine is the world’s leading business magazine written strictly for CEOs, CFOs, CIOs, senior management executives, business leaders, and high net worth individuals worldwide.

https://www.linkedin.com/company/ceomagazine/