Termination Without Cause and Marissa Mayer’s $141M Payday
Termination Without Cause and Marissa Mayer’s $141M Payday
When negotiating an employment agreement, the provision covering termination without cause is among the most important. High-profile executive exits — like Marissa Mayer’s well-reported severance arrangements — show why a carefully negotiated exit provision can be worth many multiples of base pay. See the full coverage: View Article (add link in editor).
A “termination without cause” clause typically allows an employer to end employment for non-fault reasons (restructuring, leadership change, business decisions) while triggering contractual protections for the executive or employee. Those protections commonly include severance pay, accelerated vesting of equity, continuation of benefits, and sometimes tax-gross-ups or other negotiated protections. For senior leaders the numbers can be substantial; for rank-and-file employees the same concepts still matter — particularly when commissions, equity, or long-term incentives are at stake.
Why this clause matters
- Financial security at exit: Specifies severance formula (months’ pay, bonus proration, equity vesting).
- Protects negotiated equity: Prevents forfeiture of long-term incentives when termination isn’t misconduct-based.
- Limits legal exposure: Defines post-termination obligations, restrictive covenants, and dispute resolution.
- Avoids surprise consequences: Clarifies benefit continuation, COBRA, and bonus treatment.
Negotiation tips
- Define “cause” and “without cause” precisely (examples matter).
- Negotiate severance measured in months or a multiple of compensation.
- Include accelerated vesting or a payout formula for equity.
- Seek clear language on bonus proration and benefit continuation.
- Consider mitigation language and carveouts for good leaver treatment.
- Get counsel to review tax implications, especially for executives.
If you are negotiating an employment contract – at any level – treat your exit provisions as core economic terms, not boilerplate. A well-drafted termination-without-cause clause can preserve income, protect equity, and reduce litigation risk.
For practical help, contact our office to review your agreement and negotiate exit protections tailored to your role and goals. See why Marissa Mayer agrees: View Article
If you’re negotiating an employment contract, think carefully about your exit!
