When He first made that offer my negotiation went something like this,
um, no.
how about $2,000 per month just to get you by and 5% of the company.
He laughed.
Then we didn't talk for about 3 months.
I came back and said, come on, how about $5K per month and 8%
He said, no
We didn't talk for another month
He came back and said, my schedule is freeing up and obligations are ending. Are you still up for a CEO? Can you do $20K per month and 20%,
I said no.
We didn't talk for a month.
I came back and said, look, how about 15% and 10K? He said, ok.
all these brilliant minds that are the shens callers.
God you annoy me. more often than not shens callers are wrong. they annoy me more than the OP that may or may not have lied in the first place. half of them call shens w/o know but just feel like saying it. the attacks on supposed inconsistencies of stories of the OP are more often explained just because bigger concepts cannot often be explained in 2 or 3 posts, but they insist on calling shens anyway.
God you annoy me. more often than not shens callers are wrong. they annoy me more than the OP that may or may not have lied in the first place. half of them call shens w/o know but just feel like saying it. the attacks on supposed inconsistencies of stories of the OP are more often explained just because bigger concepts cannot often be explained in 2 or 3 posts, but they insist on calling shens anyway.
That is a golden post that could have saved me much face when I tried to explain the big picture of my "megan" problem.
Yea, but it doesn't seem like any negotiation went on. It's not like you got him to take less money in exchange for a bigger stake or future stake in the company. You got him to take significantly less more and a much smaller portion. You sure you want a guy that would give in that much as the CEO of your company?
This discussion seems to have gone way off topic. TechBoyJK - should you decide to draft the contract yourself (which would be cheaper than having an attorney write one up), you should at the very least have one review the contract. I was reading earlier about not having this CEO's equity vest for something like 18 months. Something like that might make the contract unconscionable because so much of his contract is dependent on him staying with the company for a long period of time. My basic point is that at the very least have an attorney review the contract BEFORE anyone signs it (and if there are any alternations to the contract by the other side, have it reviewed again). There are also big tax issues you need to be thinking about when it comes to his/her compensation package. That's another thing you will need some advice on, which may cost you a little bit. However, the tax savings will definitely be worth it.
way off topic. I'm actually also working with an incubator which provides attornies etc., and they also will be looking at the contract. The prospect CEO in question is an attorney as well. So I need to be able deal with that.
I'm actually pretty impressed most owners dont know when to step down and pass the CEO reigns onto someone else.
Kudos to you!
Kudos to you!
We've negotiated other deals before. He always throws a high number out there just in case someone will bite. Like I said, several months went by where we didn't even talk, much less negotiate. Not speaking is part of the process.
Originally posted by: Finality
I'm actually pretty impressed most owners dont know when to step down and pass the CEO reigns onto someone else.
Kudos to you!
yea, well I should have done it a long time ago. Once the company sells I will probably spend some time with a shrink to piece my head back together for a normal life.
thanks, btw.
And you thought to post this without even reading what's already been posted? Wow. Guess what? It's been covered already.
My first thought was to get several attorneys.
My second thought was to go to my church and talk to the attorneys there.
My third thought was to ask the director of the Incubator that I have my office in.
My fourth thought was to ask another CEO that I know for a copy of his contract and any advice he has.
Somewhere down the line I thought it might be a good idea and see if any body on anandtech had some advice.
AgaBoogaBoo
Lifer
- Feb 16, 2003
- 26,107
- 4
- 81
Originally posted by: Finality
I'm actually pretty impressed most owners dont know when to step down and pass the CEO reigns onto someone else.
Kudos to you!
That's a VERY good point!
Michael
Elite member
- Nov 19, 1999
- 5,435
- 234
- 106
Contracts that vest an equity stake over time are common. In this case, you'll probably be giving restricted shares. There are tons of ways to structure this, consult your lawyers. I'm guessing it'll look like this:
Base amount of equity that vests over a defined period
Bonus level of equity that is earned for hitting certain targets that also vests over time.
You want the time element so that you lock him into the job. It is damaging to have a senior executive leave.
You could even make him President and COO first with a clause that, if he is still there, he automatically becomes CEO after 3 or 6 months.
Michael (not a CEO, but am a CFO <not of a small start-up>)
ps - this is a dumb place to be asking advice at and I'm natuarally suspicious of the reason why anyone would ask for advice like this here.
Base amount of equity that vests over a defined period
Bonus level of equity that is earned for hitting certain targets that also vests over time.
You want the time element so that you lock him into the job. It is damaging to have a senior executive leave.
You could even make him President and COO first with a clause that, if he is still there, he automatically becomes CEO after 3 or 6 months.
Michael (not a CEO, but am a CFO <not of a small start-up>)
ps - this is a dumb place to be asking advice at and I'm natuarally suspicious of the reason why anyone would ask for advice like this here.
Hey buddy, take a deep breath, calm down. His judgment has already been questioned, that's all I'm saying. He's clarified it; it's a done deal. There is no need to chime in with something that's already been stated. Just leave it at that.
By the way, typically those who quickly blurt out stuff like, "insecure numbnut," are the ones that have self-esteem issues. Just relax my man, people like you, they really do.
Oh, and it's, "smart aleck," not, "smart eleck," since I'm an insecure numbnut that has to point everything out.
lol, first off, thanks for the advice. This is the reason I posted here. Look, I'm in with an incubator, attorney's there, I have my own attorney, i several shareholders that are attorney's as well. I will be approaching them all about issues with the contract ahead of time, but every little piece that I can throw in before it happens makes things easier. It was rather simple to make a post here, and I figured if just one post out of X posts gives quality input, then its worth the time.
As petty as a resource as it may seem, I appreciate some of the feedback I get on this site.
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