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it's totally kosher in the US. In my failing startup that was acquired, all eng got a carve out. It was basically a bonus to get us to remain employees after
by x0x0 8y ago
it's totally kosher in the US.
In my failing startup that was acquired, all eng got a carve out. It was basically a bonus to get us to remain employees after it became obvious the company was failing and was going to be sold.
I'd imagine the legality goes like this: without that bonus, I certainly would have left. And there would have been nothing to be sold. So it was long-term better for investors.
- jjeaff 8y agoIt's only legal because there is a legitimate reason to pay it. The board members in charge have a fiduciary duty to the shareholders. So you will see payouts and bonuses to executives to get them to stay with the sinking ship in hopes of eeking out more money before the collapse, but if you were to just pay a bonus to an executive on their way out, you would have a very hard time justifying that and could be sued for breach of your fiduciary duty.