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By Robert A. Adelson, Esq.Although executive salary data can readily be found in online recruiting websites and executive compensation surveys by Gartner or Mercer, manyísuite executives೴ill wonder if they are getting the salary, bonus and equity that they deserve, especially when they have special attributes and are hired with specific objectives in mind. For those situations, I have developed a model for customॸecutive compensation packagesയ address their needs.When Would You Seek a Custom Executive Compensation Package?There are three major circumstances that call for a custom executive salary and compensation package:Start-up and early stage company CEOs֠these companies often cannot afford the proper executive pay, so a custom package may be necessary to complete the recruitment for the benefit of both parties.Turnaround CEO situation֠if a company has performed poorly, is in a downward spiral so its very survival is unclear, and very much needs the right executive to right the ship, then the risks being taken merit a custom compensation package.Special needs C-level executiveಥcruitment ֠if the executive has special attributes that fill a critical need for the company, especially in times like these, where people are hard to find, those special attributes or key company needs justify a custom package.ࠑuestions to Ask Yourselfԯ come up with a salary, bonus and equity compensation proposal, you need to ask yourself: what do I need to make this move. Your future employer must not only make up for your loss of pay and benefits but also compensate you for̯ss of comfort. You are well established and perhaps a rising star with your current employer. If you go to a new company, you will need to prove yourself again, without your current champions.ࠌoss of platform. Your high standing in your field is known where you are. You are actively sought after by recruiters. With this move, you might be going to a less visible industry or field.̯ss of opportunities. This may be a very good opportunity, but you may get other new and even better opportunities in the next two or three years. If you commit to this offer, you will be off the market for at least this period.ࠗhat Should Be Your Executive Salary, Bonus & EquitySurely, you want your new compensation to at least match your current package in salary and benefits. If the salary is not matched, the contract can provide for ӳpringingԠsalary that more than makes up for what youҶe given up as success is achieved. There are companies that can provide services to match your benefits to those offered at your prior firm.Theॱuity component of your executive payੳ most important. If the company is a startup or in a turnaround situation, its gross assets may well be under $50 million. If so, you would want the company to be structured as a C corporation and be issued Qualified Small Business Stock (QSBS), where potentially the first $10 million of capital gain can be excluded so that there is no Federal taxation and all further gain above that would be at lower capital gains rates. Where the company is an LLC, then you would seek profits interests, where the threshold company and per unit value is clearly stated and you could potentially get capital gains treatment on later sale of your units at a price above the threshold.רere the company is a family business or other business that wonҴ issue actual equity, you would want a customized package centered onనantom stockIn each of the above approaches, you want a tie between the compensation andഥrms of employment, so there is requisite vesting if you౵it for good reason௲ areഥrminated without cause, or increased acceleration onࣨange of control௦ the company.ࠈow much equity should you get? If the company is not public, which is generally the case with startup and emerging companies and many turnarounds as well, then you should discuss amount of equity in terms of your percentage of the fully diluted equity of the company. Your future employer may try to get you focused on number of shares ֠but it is best to start with percentage and then have the company represent to you that the shares are equal to the agreed upon percentage.Your percentage interest would depend on two factors: what will it take to get you to make a move, and whatҳ your presence worth to the company?ࠇetting Your Prospective Employer to Buy-inTo sell the company that you should get 6% or 8% or even 10% when the Mercer metric recommends 3%, or you should get options rather than QSBS, I, as yourॸecutive compensation attorney, would use the following arguments. (References to ӹouԠare to the company with whom we are negotiating.)You want an ӁԠplayer. My executive is the best or one of the best in his or her field. Not having an ӁԠplayer in your team could make the difference between success and failure. Furthermore, it will diminish your ability to attract other ӁԠplayers, attract capital investment, and to enlist other stakeholders.You want alignment. Give my executive the salary, bonus and compelling equity interest that fully aligns him or her with the companyҳ growth goals and you will assure his or her long term commitment.Success for my client means even greater success for you. Even where my client retains a 6% equity position through to the IPO, it means the other stockholders hold a 94% position and hence enjoy even greater gains.࠙ou can deploy similar arguments to achieve the kind of results as I have done for my clients in the past. But clearly, an executive employment attorney, skilled in tax law as well as corporate, securities and contract law would be able to provide invaluable assistance in these matters.