EXECUTIVE EMPLOYMENT AGREEMENTS NOT AUTOMATIC

I know of two recently aborted CEO executive employment agreement efforts. The negotiations were benign or non-existent. The terms were neither onerous nor one-sided. The companies simply pulled the plug and decided not to move forward with the employment contracts. What gives? Is this the start of a trend? Hardly. Because of current economic uncertainty, an organization’s board of directors is more risk adverse, is non-committal and believes the board of directors has more bargaining power. Of course, a compelling CEO candidate, who does not need the job, can still demand an employment agreement. Some CEO candidates are so sure of their leadership skills and of their value that they confidently fly naked, i.e. they go without an employment agreement.

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