CEOs, like football coaches, don’t retire. They always get fired. Let me qualify that: For those of us unafraid to lead change in aging institutions, who must grapple with people in key positions who have tenure all their own, and are willing to take on the challenge of financial deficits and uncooperative teams, know this: in the end, we go out as we came in. We get fired. Everyone loves us on the way in because we’re going to fix things up and make their future more secure. But once you do that, and in the process begin to demand productivity and accountability, you’re just a pain in the ass to people and they are not afraid to speak up about it.
So, no matter how anxious you are to jump in and get started at your new job, wait until you’re operating under a contract that protects your interests now and in the future.
There are many things to consider and I strongly suggest you get yourself a great human resources attorney to help you. You want someone who works on the other side of the corporate line–the kind of attorney who, in other circumstances, might be asking you some tough questions. I far prefer and recommend you hire an ass-kicking female attorney as in almost all the human resources litigation battles I’ve been in, opposing counsel invariably is female. They seem to talk the talk better and also, in the majority of cases, they are talking to corporate human resources which, in my experience, is predominately where you find female executives.
Every CEO should have personal counsel that stays with you throughout your career. He or she should understand your motives, your idiosyncrasies, your style and should help you in crafting an employment agreement that works. Once you engage, your attorney should be kept up to date with any compensation and/or performance reviews (or the lack of same), and any other correspondence that you feel may at some point come back to harm or question you. When you get in a jam, and you will, you don’t want to be playing dialing-for-help or worse, trying to convince a new attorney that you’re a good guy or gal.
If you’re going into a hostile environment, or if you’re going into an environment hostilely, you want a contract that basically says, hey, we all understand this is already hostile so you can’t come back later on and whack me when someone gets upset. There are always people in organizations who are upset about change. Where your predecessor might have let them slide a bit on meeting objectives, or let them take Friday afternoons off, you don’t; therefore, you eventually will become a thorn in someone’s side. This can come back on you later and you want to be protected against these kinds of issues or potential allegations that come with the territory. Your help and decisiveness that everyone loved the day you walked in are often soon forgotten.
You also need to think carefully about a parachute of some kind that keeps you going if someone pulls the plug on you. Most contracts for the top executive will carry some sort of buyout clause. People get sick of you, the board gets sick of you, whatever, you need to establish how much cash you have to have in order to complete the timetable of transition. There are several tricks here. Most attorneys will want a two-step out; the first for “good reason” or “no cause,” and the second “for cause.” If you think you ever get a shot at the former, good luck and God bless you. Boards always want to terminate you “for cause” and if they can get something that sticks, you lose your ability to negotiate a safe exit and you’ll wind up fighting them in court or in arbitration. Your contract should maintain the same financial deal whether you go happy or you go being dragged down the hall on your ass. Setting the stage up front while everyone is thrilled to be bringing you on board is a lot easier than it is when the chips are down and you are, too. Remember, on the day they hired you they made the best decision of their lives, and that enthusiasm should work to get you the best deal for your exit on the day you start.
Another key point is to establish a travel and expense policy that meets your needs. Write it yourself, take it to the board, have them ratify it and publish it with human resources, the controller, your executive admin, and your audit team.
Your company travel and expense policy needs to be written in accordance with your needs, which is the reason you must write it yourself. No one in the organization understands what you do every day and also what you can’t do in order to do your job. For instance, it is not the best use of your time to be sitting in coach, trying to find wi-fi and unable to open your laptop all the way because the guy in front of you put his seat back and is snoring happily away while you’re trying to get down the terms of a deal you just agreed to. I always expected, both of myself and the executives who worked for me, to use flying time as work time. There is a reason why they created first-class seats.
Make sure that the board expects the best from you and also for you. This means you don’t always have to say who you had dinner with or who you met with in Los Angeles. There are so many examples of how this seemingly small issue can really hurt an organization that it’s critical to your success, and the board needs to understand why.
To emphasize my advice: At one point I was actively interviewing candidates to replace two board members that had far outworn their contribution to the organization. I had polled my executive team to discern their thoughts and we were all in complete agreement. I set off on a journey to find suitable candidates. This required both travel and dinners, which at that level were not at McDonald’s. Through some condition of fate, the board became aware of my actions and before I could act, they did. In my exit interview, one of their claims “for cause” was that I failed to accurately record who I met with and where I met them. In the interview, I refused to name the folks I talked to or where I was. They called this insubordination and added it to the list of “for cause termination.”
In one job I had, in a company with a commodity-driven product, where I went and who I met with had the potential to move the market, and not always in a positive way. Keeping my travel quiet and not always telling everyone where I was going was critical to my success.
Be sure your travel and expense policy allows you to move with stealth, and act to your station which may mean expensive nights out with potential execs, or flying first-class with the folks you’re making a deal with, or buying someone an expensive gift or a bottle of wine. In short, if your board trusts you, you need to spend what you need to spend to get the job done. Having such a policy in place helps the board remember the agreement when it comes time to part ways.
When that time comes, try not to wallow around too much in it and never allow the mud to stick to your feet.