representing employees at all
stages of their careers, from service workers to CEOs.
Employers often want employees to think like company owners, by issuing stock, options to purchase stock or other forms of equity equivalents, such as phantom stock. There are a variety of methods for gaining ownership in a company, each of which differ significantly to both the company and the employees.
Wrongful cancellations of employee stock options and grants, breach of option agreements or wrongful termination of options are often sufficient grounds for legal action.
We are now firmly entrenched in the Say-on-Pay era and the varying consequences that comes with it. Say-on-Pay requires some companies to approach their shareholders to vote on executive compensation. While that vote is often non-binding, the implications can be significant to the end results.
So, what are we talking about? Companies typically compensate their executives by making equity and equity style grants. Each equity compensation agreement is different, and it is important that the employee thoroughly reads through the details in the plan and granting agreements, especially checking the strike price, acceleration provisions, the benefits, and the dates from which it can be exercised.
The most common types of equity are:
Knowing exactly what type of equity that your company offers to you is crucial, both to know what you’re getting and to understand if the company has breached its equity grant agreement. As you can see, each type of stock comes with its own set of rules that an employer must abide to, each of which results in different benefits to the employee. If you are negotiating for one of these grants, believe your company has breached one of the rules or you believe you’ve earned equity you never received, please contact us today.
Click here to view our FAQs on Executive Compensation.
This information is not a do-it-yourself guide to resolving employment disputes or handling employment litigation. While some may find this useful for understanding the basic issues and their legal context, it is NOT a substitute for experienced legal counsel and does not provide legal advice. Please contact the team at Gordon Law Group to discuss your specific case.