Employment Contracts with Lead Management and Key Personnel
Legal support of labor relations with lead management and key employees
Managers of various levels in organizations are key personnel, the majority of the company's further actions, its development and financial indicators depend on the decisions they make. Top managers usually include the company's management team, usually the manager, his deputies, and heads of structural divisions. Often, leading specialists in a particular industry are appointed to the positions of top managers, and third-party employees are also invited to perform specific tasks or functions, for example, anti-crisis managers.
Employment contract with CEO
A company’s CEO is not just an employee working under an employment contract, he is the representative of the organization as a whole, who is entrusted with the rights and responsibilities for managing the organization, building a development strategy, managing financial flows, interacting with various bodies and organizations.
Depending on the legal form of the company, the hiring of the head of the organization is regulated not only by labor law, but when drafting an employment contract, various federal laws governing the interaction of the head of the company are taken into account, for example:
- Federal Law of 08.02.1998 No. 14-FZ “On Limited Liability Companies”;
- Federal Law of 26.12.1995 No. 208-FZ “On Joint-Stock Companies”, etc.
An employment contract with the general director is signed by an authorized representative of the organization, depending on the legal form of the company. In addition to the employment contract, it is also necessary to issue an order for employment and make an entry in the work book (if it is kept in paper form).
It is important to note that the general provisions of labor law in terms of formalizing labor relations with company executives may be accompanied by additional conditions, which must also be reflected in the employment contract with the head of the company. Existing standard employment contracts with the CEO may not take into account all the specifics of the organization's activities, which may subsequently have a negative impact not only on the interaction of founders or shareholders with the CEO, but also on the functioning of the company as a whole.
Employment contracts with lead management
Most companies are not limited to just having a CEO and chief accountant; as a rule, there are deputy managers on staff, the so-called top management. As with other employees, an employment contract must be concluded with top management. However, given the level of responsibility and the importance of the decisions made, for such specialists, the company's policy may provide for additional conditions not specified by labor legislation.
As a rule, employment contracts with top management reflect additional incentives for achieving qualitative and quantitative performance indicators of the organization.
It is important to reflect that standard employment contracts often may not reflect the necessary conditions for interaction between top management and the company's management, important indicators that the company strives for, in connection with which, when developing a draft employment contract with such specialists, it is necessary to take into account all aspects of the top management's work. To reflect all the necessary conditions, it is necessary not only to study the future work activity of top management, but also the company's capabilities, often to develop a draft employment contract with such employees, the company's management attracts experienced lawyers who are able to understand the work of the organization and take into account all the necessary aspects of work for the competent drafting of an employment contract with such specialists.
Preparation of option programs for lead management
The main goal of option programs for lead management is to motivate the management of the organization to increase the value of the company in the long term. The choice of certain methods of remuneration of the management of the organization depends, first of all, on the development goals of the company.
At the same time, given that option programs are usually designed for the long term, the remuneration system is one of the tools for the development of the company as a whole. At the same time, the coordination of the actions of the owners and management, taking into account option programs for lead management, allows for the development of the company in the long term, while such programs can change depending on external circumstances and internal capabilities.
Meanwhile, civil legislation provides that under an option agreement, one party, on the terms stipulated by this agreement, has the right to demand from the other party, within the period established by the agreement, the performance of actions stipulated by the option agreement (including paying money, transferring or accepting property), and if the authorized party does not make a demand within the specified period, the option agreement is terminated. An option agreement may stipulate that a claim under the option agreement is considered declared upon the occurrence of circumstances specified in such agreement.
It is important to note that the development and implementation of option programs must be documented to avoid misunderstandings between business owners and top management.
Incentive programs and equity participation plans
Various employee incentive measures help motivate employees to achieve the company's desired results, to become participants not only in work activities, but also to participate in the management of the company.
More and more companies are not just issuing securities of their organization and selling them on the securities markets, but also issuing such securities to their employees, for example, for a certain amount of time of work in this organization, or selling them at lower prices than if such a security were purchased on the securities market. This becomes an additional incentive to work in a particular organization; receiving such bonuses, employees have a desire to continue working for the company. In most cases, many companies develop various measures to encourage employees, but it is important to remember that additional payments, bonuses, incentive programs are not just the financial interest of employees, but also certain obligations for the company itself, for example, to pay dividends, or pay additional fees and payments, when paying remuneration in cash.
It is possible to exclude the adverse consequences of even good intentions in the form of additional methods of stimulating employees only if you take into account all aspects of this issue in compliance with all the norms of current legislation.
Legal services
- Consulting on employment relations with lead managers and key personnel
- Legal support for the registration of labor relations with the company’s management
- Preparation of the necessary documents for the registration of labor relations with lead managers and key employees
- Legal support for additional measures to encourage employees of the company
