Fighting the Double Trigger as Free Labor vs Slavery II: Negotiating with a Public Company Change of Control Acceleration Terms

 On Tuesday April 30, 2024, CEOWorld magazine published an article I wrote titled, “Fighting the Double Trigger as Free Labor vs Slavery II: Negotiating with a Public Company Change of Control Acceleration Terms.”

The new article is designed for public company CEOs and C-level executives, or those senior executives who may be negotiating terms to become a public company C-level executive, where in either case an acquisition and equity acceleration on change of control is part of the considerations in those job offer negotiations.

On September 15, 2023, CEOWORLD published my article “Fighting the Double Trigger as free labor vs slavery: How to negotiate your own Change of Control acceleration terms.” Since that time, I have represented a number of CEO and C-level executive clients where this issue has been an important executive compensation consideration.

Special resistance has arisen with regard to public company executives. In the case of one public company CEO client of mine, we were told by the national law firm representing the public company, that the single trigger is just not done by public companies. The major law firm told my CEO and the company’s Board Compensation Committee that using the single trigger just doesn’t happen in public companies. We were told their rejection of the single trigger was rooted in universal practice of public companies and also for a host of practical reasons.

Yet, despite this initial flat-out rejection of the single trigger, we persevered. In the course of my representation, I rebutted each of the big law firm’s arguments made for the double trigger and was able to offer numerous examples of public companies that, in fact, had used the single trigger. In the end, my arguments and the precedents I offered, proved to be persuasive. My client CEO succeeded in convincing the Board Compensation Committee to go against corporate counsel and accept the terms I drafted in my client’s revised CEO Employment Agreement for a single trigger acceleration in the event of a change of control in that public company.

In my new CEOWORLD article published last week, I share my arguments and some of the precedents I offered to successfully achieve single trigger acceleration terms for my public company CEO client.

As with my September 15 article, I concluded with the words of Abraham Lincoln in his 7th and final debate with Stephen A. Douglas:

It is the eternal struggle between these two principles — right and wrong — throughout the world. They are the two principles that have stood face to face from the beginning of time; and will ever continue to struggle. The one is the common right of humanity and the other the divine right of kings. It is the same principle in whatever shape it develops itself. It is the same spirit that says, “You work and toil and earn bread, and I’ll eat it.” No matter in what shape it comes, whether from the mouth of a king who seeks to bestride the people of his own nation and live by the fruit of their labor, or from one race of men as an apology for enslaving another race, it is the same tyrannical principle. “

Abraham Lincoln, at Alton, Illinois, October 15, 1858

Certainly, I am not saying that you, as CEO, are an enslaved person. You are not. However, when I view the Double Trigger, and see you work, and struggle and earn a liquidity event and investors “eat it” — that is, the investors alone reap the benefits of your labor, then I suggest Lincoln would still label this practice as the “theft of labor.”

My hope here, is that this article might be of benefit to other public company CEOs and C-level executives in similar circumstances.

To see my full CEOWORLD magazine. article, go to LINK: https://ceoworld.biz/2024/04/30/fighting-the-double-trigger-as-free-labor-vs-slavery-ii-negotiating-with-a-public-company-change-of-control-acceleration-terms/

Or on my website at https://www.executiveemploymentattorney.com/fighting-the-double-trigger-negotiating-with-a-public-company-change-of-control-acceleration-terms/

This was my 45th 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 44 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/

Tweeting or X-ing My New CEOWorld article on “Fighting the Double Trigger as Free Labor vs Slavery II: Negotiating with a Public Company Change of Control Acceleration Terms.”

If you tweet or X and would like to tweet or X my article, here are my five (5) tweets to retweet one or more or to use in your own tweet or x –

4/30/24 article @ceoworld by @attorneyadelson for #CEOs #CLevel and #Seniorexecutives on Fighting the #DoubleTrigger as #freelabor vs #slavery: In #publiccompany gaining #singletrigger #acceleration on closing of a #ChangeofControl https://ceoworld.biz/2024/04/30/fighting-the-double-trigger-as-free-labor-vs-slavery-ii-negotiating-with-a-public-company-change-of-control-acceleration-terms/ via @CEOWORLD magazine

4/30/24 article @ceoworld by @attorneyadelson for #publiccompany #CEOs & #Seniorexecutives on Fighting #DoubleTrigger so #ChangeofControl #acceleration #triggered on #dealclosing so you can #pursue & start other #careeropportunities https://ceoworld.biz/2024/04/30/fighting-the-double-trigger-as-free-labor-vs-slavery-ii-negotiating-with-a-public-company-change-of-control-acceleration-terms/ via @CEOWORLD magazine

4/30/24 article @ceoworld by @attorneyadelson for each #publiccompany #CEO on Fighting the #DoubleTrigger as #freelabor v #slavery with #ChangeofControl #acceleration #triggered on #dealclosing so u can freely assess any #retention https://ceoworld.biz/2024/04/30/fighting-the-double-trigger-as-free-labor-vs-slavery-ii-negotiating-with-a-public-company-change-of-control-acceleration-terms/ via @CEOWORLD magazine

4/30/24 article @ceoworld by @attorneyadelson for #publiccompany #CLevelexecutives on Fighting #DoubleTrigger so your #ChangeofControl #acceleration #triggered on #dealclosing same time as #investorpayout &no more #serviceconditions https://ceoworld.biz/2024/04/30/fighting-the-double-trigger-as-free-labor-vs-slavery-ii-negotiating-with-a-public-company-change-of-control-acceleration-terms/ via @CEOWORLD magazine

4/30/24 article @ceoworld by @attorneyadelson for each #publiccompanyCEO on Fighting the #DoubleTrigger as #freelabor vs #slavery with #ChangeofControl #acceleration #triggered on #dealclosing & no #investorpremium from your lockup https://ceoworld.biz/2024/04/30/fighting-the-double-trigger-as-free-labor-vs-slavery-ii-negotiating-with-a-public-company-change-of-control-acceleration-terms/ via @CEOWORLD magazine

If you or any colleague of yours has a need in this area, please do reach out to me — rob@attorneyadelson.com or call 617–875–8665.

A Change of Control Agreement Saves the Day When Your Company Is In Play

Two and a half weeks ago, on Thursday December 16, 2021, the website Ivy Exec published under executive “Advancing” an article I wrote on “A Change of Control Agreement Saves the Day When Your Company Is in Play”.
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This new article is designed not only for C-level and senior executives, but even for many directors and mid-level executives, whose companies are now “in play” — that there may be a sale of the company with new owners and to some extent a whole new successor employer.

My article first discusses this situation faced by the executives, then advocates self-assessment of your role and importance in the pre-deal and post deal environment, and finally the importance of establishing your role and rights in a retention / change of control agreement. Among the key elements of that agreement are the following:

• Significant equity of the target company to the executive
• Liquidity for the executive on the levels of liquidity offered owners
• Properly structured equity, tax favored for capital gain taxation
• Proper severance in the event of early termination after the acquisition
• Ability to trigger severance if the executive’s position or responsibilities are reduced
• Proper structuring to avoid potential excise tax for parachute payments under IRC §280G.

To see my full IvyExec Career Advice website article, go to LINK https://www.ivyexec.com/career-advice/2021/a-change-of-control-agreement-saves-the-day-when-your-company-is-in-play/
Or on my website at https://www.executiveemploymentattorney.com/a-change-of-control-agreement-saves-the-day-when-your-company-is-in-play/

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/

It is my hope that this article will be of benefit to VPs, directors and senior executives who have are trying to navigate a change in control in their companies. My article suggests terms and approaches to each of you and thus I hope will provide you a benefit in your negotiations.
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Feel free to tweet or share this article. If you or any colleague of yours needs assistance in negotiating a change of control situation, please do reach out to me.

Negotiating Executive Retention Agreement Terms to Protect Your Interests

On April 26, 2019, CEOWorld magazine published an article I wrote on “Negotiating Executive Retention Agreement Terms to Protect Your Interests” The magazine advised me that I can use “Featured in the CEOWORLD magazine” and the CEOWORLD “Logo” on my website. 

This article is designed for CEOs, CMOs, CSOs, CTOs and other C-suite and senior executives in technology and life sciences, who are being recruited and have now, or anticipate soon receiving, an attractive offer to move on, yet are also critical to their current company, where your current company might provide a significant retention package for you to stay.

This frequently occurs when the company is “in play”.  However, besides this change of control situation, my article discusses a number of other circumstances where executive retention negotiations occur, including where:

• The company is nearing a critical milestone, necessary for a funding round,
• The company is planning its IPO and needs an executive lockup,
• The executive has close relationships with key accounts and the company fears a significant loss of business,
• The executive has close relationships with key management and performers in the company and fears a significant attrition,
• The executive as an inventor, innovator and technologist has a critical role in product creation, maintenance or development, or
• The executive has achieved a level of notoriety such that his or her loss could have a negative impact on perception of the company within the customer or business community where the company operates.

My article also discusses how to raise the issue of executive retention, how to negotiate and frame the executive retention package as a mutually beneficial “win-win” for the executive and the company, and finally the key terms to seek in your executive retention agreement.

To see my full CEOWorld magazine. article, go to LINK:  https://ceoworld.biz/2019/04/26/negotiating-executive-retention-agreement-terms-to-protect-your-interests/
Or on my website https://www.executiveemploymentattorney.com/executive-retention-agreement/
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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.

It is my hope that this article will be helpful to CEOs, CMOs, CSOs, CTOs and other C-suite and senior executives in technology and life sciences, who are being recruited and have now, or anticipate soon receiving, an attractive offer to move on, yet are also critical to their current company, where the current company might provide a significant retention package for the executive to stay.   If you or any colleague of yours has a need in this area, please do reach out to me at radelson@engelschultz.com.

Representative cases of executive retention and change of control agreements

• CEO of a Massachusetts medical products manufacturer – change of control agreement
• Senior Vice President of Massachusetts financial institution – retention and severance agreements

Robert A. Adelson, Esq. is a business and tax attorney, and partner in the firm Engel & Schultz LLP in Boston, MA.  He has an advanced LLM degree in the law of Taxation from NYU and has for more than 20 years represented CEOs, C-Suite and senior executives across the country in issues of senior executive employment including terms of equity, executive compensation package, severance agreement, change of control, restrictive covenants and other key executive issues. 

Change of control agreements – A quick guide for CEOs, CFOs, and other senior executives

You are a C-suite officer or senior executive and your company is "in play" and may be acquired.  How do you protect yourself  or even advance your position in the event of a "successful" acquisition and change in control of your company?

My article on this subject was published March 1, 2016 by CEOWorld magazine.

The article first discusses this situation faced by CEOs. COOs, CTOs, CMOs and other C-Suite and senior executives, then advocates self-assessment of your role and importance in the pre-deal and post deal environment, and finally the importance of establishing your role and rights in a retention / change of control agreement.

Among the key elements of that agreement are the following:

• Significant equity of the target company to the executive,
• Liquidity for the executive on the levels of liquidity offered owners
• Properly structured equity, tax favored for capital gain taxation
• Proper severance in the event of early termination after the acquisition
• The ability to trigger severance if the executive's position or responsibilities are reduced
• Proper structuring to avoid potential excise tax for parachute payments under IRC §280G.

To see my full article, go to LINK: http://ceoworld.biz/2016/03/01/change-of-control-agreements-a-quick-guide-for-ceos-cfos-and-other-senior-executi

or my website at https://www.executiveemploymentattorney.com/change-of-control-agreements-a-quick-guide-for-ceos-cfos-and-other-senior-executives/

If you or one of your colleagues is in a change of control situation, I am glad to assist.  Please do reach out to me at radelson@engelschultz.com.

Robert A. Adelson, Esq. is a corporate and tax attorney and partner at Engel & Schultz LLP, Boston, Massachusetts. He represents C-Level executives and key employees in negotiations over executive employment terms, equity, compensation, relocation, retention and separation agreements, severance packages, and where necessary suits over wrongful termination.