An Employment Agreement Will Set Up Your New Nonprofit CEO for Success: Suzanne King Authors Article for Bridgespan Group
Pierce Atwood employment law partner Suzanne King discusses the importance of creating a “well-drafted” employment agreement that can help set up a new CEO for success. An employment agreement should clearly spell out the board’s goals, it should include the board’s expectations and the metrics it plans to use to measure success, and also detail the CEO’s contract terms, compensation, benefits, and more.
And while it seems like bad timing to discuss the end of the employment agreement when just beginning one, it’s important to also detail the circumstances that could lead to termination – with or without cause. In addition, since nonprofits are “subject to significant tax penalties if certain key executives, including the CEO, receive ‘excess benefits’ from the organization,” the board should discuss the complex rules surrounding compensation with experienced employment counsel before finalizing the agreement.