Share options, bonus disputes and pay negotiations

Share options, bonus disputes and pay negotiations involve complex areas of employment law. It is important that you seek the advice of an experienced employment solicitor when entering into employment terms with share options and/or bonus or commission schemes.

A share option is an option given by an employer to an employee to purchase shares in the company at a fixed price or at a discount set by the employer. This is offered as an incentive because it allows the Senior Executive to purchase shares at a lower entry price and to share in the success of the company if the value of the shares increases. When entering employment, ensure you take advice on the share scheme and, similarly, when leaving employment make sure you understand the impact on your share options.

An employer may implement a Long Term Incentive Plan (LTIP) which is often in the form of restricted stock units (RSUs). This is particularly common in banking contracts. If you are disciplined for gross misconduct or you breach your restrictive covenants, you are likely to forfeit your deferred compensation. Understanding your obligations under the contract can avoid costly repercussions.

Most litigated bonus disputes stem from the non-payment of discretionary bonus schemes. However, board discretion has its limitations and there are a number of challenges available to a Senior Executive who feels they have been short-changed.

Negotiating a better salary and benefits is something that every employee should be focused on as their careers progress. Following a promotion, or after years of successful service, it is likely that the value of work you do is no longer reflected in the compensation you receive for that work. It is important to approach the issue objectively, build an evidence-based case for your desired salary and benefits and negotiate hard for this package.

Our employment team at Penningtons Manches Cooper can provide expert negotiation skills and experience, giving you the confidence to put your best arguments forward when entering into share options and pay negotiations or bonus disputes.