How Are Minnesota Executive Contracts and Pro Sports Contracts Different?

Executive contracts in Minnesota are completely different from a professional sports contract for one gigantic reason: support from a union.

A lot of times, executives have this idea of free agency, when in reality, the game is slightly different.  Thus, here is a birds-eye-view of an executive agreement for employees in Minnesota.

Executives are Employees or Owners

Generally, an executive is either an employee or an owner or both.  When tagged as an owner, it boils down to control, ownership rights and percentages.  The distinction though is separating oneself from a union like agreement.

Professional athletes have player rights that are like or similar to other players.  Executives have individual rights exclusive to themselves.   Even though executives do not have the luxury of leaning on a union for a standard agreement, a lot can be gained by negotiating a written contract.

As you already know, executives serving as a high-level employee want maximum value for their expertise and service.  Owners are usually seeking equity and control.   Executives seeking control are usually doing so as part of their job description versus having equity in a company.

Of course, there are exceptions, which makes the process of negotiating a strong executive contract that much more important.

Executive Contracts and Clauses

Here are a few parts that every executive contract should include:

  • Terms and Limits
  • Compensation Clause
  • Time Off
  • Benefits (insurance, 401K, etc.)
  • Exit Strategy

Very likely, prudent executive agreements negotiated with a Minnesota employer will call for much more detail.  But, this is a short list to begin the drafting process.

Executive Contracts and Negotiations

As you might expect, negotiation strategies are different for executives currently employed by an employer versus an opportunity with a new or different entity.  Sometimes, this means examining a past contract or non-compete agreement.

A lot of high-level managers and executives immediately turn to their compensation clause.  But, one has to balance their compensation with long-term impacts like a nonsolicitation clause or non-compete agreement.

The negotiating process for an executive contract is a combination of past experience, current value, and future potential.  Whereas a professional contract is usually based on other athletic contracts, an executive agreement can be more creative.

Creativity includes money.  Whether an executive in Minnesota seeks a strong salary, stock options, ownership rights, incentives, etc., the idea is negotiating for the future. \

Time Off, Benefits and Other Executive Clauses

Because there is so much effort devoted to the value an executive brings to an organization, sometimes we overlook time off too.  For many, the PTO or personal time off calendar will match other employees serving in high roles.  But, this issue needs to be clarified with specificity.

Likewise, this is the same standard for health insurance, disability benefits, and related benefit packages.

Employees who gain more than the standard win.  Executive contracts that align with our home life are even more appealing.

Employment Agreement Exit Strategies

You are smart enough to know that having a backup plan or an exit strategy to an employment agreement makes top-notch sense.  Sometimes, this includes a buyout clause.

Other times, this means seeking help from a mediator or arbitrator.

Either way, having a procedure in place to facilitate a transition (positive or negative) can be more valuable than compensation.

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