What employees must look for in a retention agreement

| Feb 2, 2021 | Business Law |

In your role overseeing a division within your company, you are good at what you do; one of the best in your industry. Along the way, your company became an acquisition target. And it was realistic that your company would be folded into the business of a much larger corporation. To no one’s surprise, it happened.

As a senior leader, you have options. You are in demand, and other companies have dangled some enticing offers. However, the corporation that purchased your company wants to bring you along with the acquisition. Its leaders want you to stay. The new business entity desires your knowledge and expertise. You know these operations inside and out. Now, it is time to talk about a retention agreement, what needs to be in it and how it will benefit you.

Understand the offer and its details

You were a pivotal leader at your former company, and the new corporation recognizes that. You are willing to listen to their offer that, on the surface, should benefit both sides. However, you must look after yourself. Here are some key components to consider before agreeing to a retention agreement:

  • Be deliberate and methodical when considering the offer. Do not make hasty decisions. And, if you sign the agreement, understand that your time working for the new company may have an expiration date.
  • Consider the advantages and disadvantages of the retention agreement, especially if you are weighing whether to leave the new entity.
  • Make certain that you understand the offer, its terms and details. What will be your job title? Your duties? How much will they pay you? What is the bonus size? And when does the contract end?
  • Get the salary you want and deserve. Your negotiation skills come into serious play here. You are in control of this situation and remember that. You understand your value and worth, and, if the company clearly wants you, it will pay you. Be prepared to decline any offers that do not measure up.
  • If you choose to stay, understand that you are there to oversee unfinished business projects while also building a “foundation addition” for the new corporation. And that your time at the company is likely temporary.

Both you and the new corporation should benefit from a retention agreement. Please make sure you understand the agreement, your role and compensation.