How is an executive employment agreement different from a standard employment agreement?

Executive agreements typically involve more individualized negotiation of compensation, equity, severance and change-in-control terms, reflecting the executive's compensation level, decision-making authority and access to sensitive company information.

What happens to my equity if the company is acquired?

That depends on the change-in-control provisions in the employment agreement and the underlying equity plan, which should specify whether vesting accelerates fully, partially, or not at all and whether acceleration depends on the executive also being terminated in connection with the transaction.

What is a 'good reason' resignation provision?

A good reason provision allows an executive to resign and still receive severance if the company makes specified material changes, such as a significant reduction in role, compensation, or reporting authority, treating that resignation similarly to a termination without cause.

Are noncompete provisions for executives treated differently than for regular employees?

The same statutory framework, Fla. Stat. § 542.335, applies to restrictive covenants for executives and other employees alike, though an executive's broader access to strategic and financial information often supports a stronger legitimate-business-interest justification for the restriction.

Should a founder who becomes CEO of their own company have an employment agreement?

Generally yes, particularly once outside investors are involved. A written employment agreement clarifies the founder's compensation, termination rights and the treatment of equity and it should be drafted consistently with the shareholder or operating agreement governing the company's ownership.

Executive Employment Agreement Attorney

Drafting and negotiating employment agreements for executives, senior leaders and key managers.

Why executive agreements warrant individualized drafting

Executive roles carry compensation structures, decision-making authority and departure consequences that a standard employee template does not address. Executive agreements are typically negotiated individually, with attention to equity treatment, severance and the restrictive covenants appropriate to someone with access to the company's most sensitive strategic and financial information.

Compensation and incentive structure

Base salary and periodic review provisions.
Annual or performance bonus structure, including the metrics that determine payout and whether any portion is guaranteed.
Equity compensation: stock options, restricted stock, or profits interests, with a clearly defined vesting schedule.
Sign-on bonuses or make-whole payments and any repayment or clawback conditions attached to them.
Perquisites and benefits specific to the executive role.

Termination, severance and change-in-control provisions

Executive agreements typically define multiple termination scenarios (for cause, without cause, resignation for good reason, death and disability), each with different consequences for severance and equity. Change-in-control provisions address what happens to the executive's role, compensation and equity vesting if the company is acquired, merged, or undergoes a similar transaction, which is particularly relevant for companies anticipating investment or an eventual sale.

Severance formula and duration, and whether it is conditioned on a release of claims.
Accelerated vesting of equity upon a change in control or a qualifying termination.
'Good reason' definitions that allow the executive to resign and receive severance if the company materially changes the role or compensation.
Golden parachute and tax considerations for highly compensated executives at companies approaching a sale.

Restrictive covenants tailored to executive access and influence

Executives typically have access to strategic plans, financial data and client relationships that justify more robust restrictive covenants than a general employee agreement, still subject to Florida Statutes section 542.335's reasonableness requirements. Because executive covenants tend to draw closer scrutiny given the executive's compensation and negotiating position, the legitimate business interest supporting each restriction should be identified clearly.

Founders transitioning to an employment relationship with their own company

When a founder becomes an employed executive of a company that has taken on outside investors, the resulting employment agreement should be coordinated with the shareholder or operating agreement governing the founder's equity, so that termination provisions in each document are consistent rather than conflicting.

Key considerations

Executive agreements should define each termination scenario (cause, without cause, good reason, death, disability) with distinct consequences for severance and equity.
Change-in-control provisions matter more for companies anticipating investment or a future sale and should be negotiated proactively, not after a transaction is already underway.
Restrictive covenants for executives are subject to the same Fla. Stat. § 542.335 reasonableness standard as any other employee, despite the executive's greater access to sensitive information.
Founder-executives should coordinate their employment agreement with the company's governing equity documents to avoid inconsistent termination terms.
Severance and equity clawback provisions should be reviewed against any applicable tax rules before finalizing the agreement.

Answers

Frequently asked questions

How is an executive employment agreement different from a standard employment agreement?: Executive agreements typically involve more individualized negotiation of compensation, equity, severance and change-in-control terms, reflecting the executive's compensation level, decision-making authority and access to sensitive company information.
What happens to my equity if the company is acquired?: That depends on the change-in-control provisions in the employment agreement and the underlying equity plan, which should specify whether vesting accelerates fully, partially, or not at all and whether acceleration depends on the executive also being terminated in connection with the transaction.
What is a 'good reason' resignation provision?: A good reason provision allows an executive to resign and still receive severance if the company makes specified material changes, such as a significant reduction in role, compensation, or reporting authority, treating that resignation similarly to a termination without cause.
Are noncompete provisions for executives treated differently than for regular employees?: The same statutory framework, Fla. Stat. § 542.335, applies to restrictive covenants for executives and other employees alike, though an executive's broader access to strategic and financial information often supports a stronger legitimate-business-interest justification for the restriction.
Should a founder who becomes CEO of their own company have an employment agreement?: Generally yes, particularly once outside investors are involved. A written employment agreement clarifies the founder's compensation, termination rights and the treatment of equity and it should be drafted consistently with the shareholder or operating agreement governing the company's ownership.

Official sources

Consult the official sources above for current rules and procedures.

Executive Employment Agreements