When an executive or professional level employee negotiates a separation agreement, there are numerous issues that may arise. Having an experienced attorney is important or you may lose an opportunity to obtain additional value in the transaction, or much worse, you may experience an unintended negative consequence from the transaction. Moreover, the time to evaluate these issues is at the outset of the negotiation because it is difficult, and often counterproductive, to attempt to inject new terms into a negotiation that is already underway.
Issues that should be considered and evaluated when approaching a severance negotiation include:
- Tax consequences of the transaction
- Stock vesting
- COBRA reimbursement
- Return of Property
- Post-Termination Restrictive Covenants
- Cooperation Obligations
- Remedies in the event of default
There are many others as well. It is easy to get preoccupied with the monetary severance component of a negotiation. But other terms may be just as valuable and they should not be overlooked or placed on the backburner.
Finally, remember not to lose an opportunity to obtain something of value that costs the other side nothing. Of course, the converse is true. A frank dialog with the other side can often lead to additional value. Ask the other side this question, “what else can you offer me to take to my client that might help us conclude this deal?”