This chapter discusses the compensation committee's primary role in the structuring, negotiation, and implementation of employment, severance, and change-in-control arrangements for a company's top executives. It also discusses current market-based practices and attitudes with respect to whether and why a company—primarily through its compensation committee—would consider entering into these arrangements.
This chapter is divided into the following topics:
Generally, this chapter assumes that the compensation committee is establishing and implementing employment arrangements for the company's chief executive officer (CEO) and other senior executives, not rank-and-file employees.
Essentially, there are two basic and distinct employment arrangements:
Thus, an employment arrangement that is not at-will typically is evidenced by a formal written employment agreement. However, ...