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How the amounts equate to salaries is completely irrelevant unfortunately. This is a legal issue, not a moral one. A new product may double the stock price of t

How the amounts equate to salaries is completely irrelevant unfortunately. This is a legal issue, not a moral one. A new product may double the stock price of the company, but it does not entitle the engineer to a percentage of that increase, even if that product would not exist without said engineer. As per the contract, the engineer's labour is being compensated by wages and benefits. All the fruits of his/her labour are solely owned by the company. This is at least true in North America. 20% of royalties is not wages, and implies some sort of IP ownership agreement. Do you have such an agreement in place? Are there any patents with your name on them? The IP is (very likely) one of the assets of the business and will be listed on the net worth balance sheet. If you own a portion of the IP, you are entitled to a portion of the sale value of the company. If not the IP, then do you own any percentage of the company? You say he's a business partner, but it sounds like a work for hire arrangement (see first para). If the company owns all of the IP and your partner owns all of the company, it's basically his company, and you might be out of luck. You could still try negotiating a fairer payout, but it would be up to your partner's largesse. Furthermore, as you probably realize, the new owners are not obligated to honour a work for hire arrangement.

trhway 6y ago
>As per the contract, the engineer's labour is being compensated by wages and benefits. All the fruits of his/her labour are solely owned by the company. This is at least true in North America. [IANAL] Labour - yes. My understanding though is that despite wages, etc. the copyright/IP belongs to the engineer until there is an assignment agreement in place - that piece of paper we all sign coming to a new job and every time again when our patents get filed. If it were in the US and the OP doesn't have such assignment signed, i'd think the sale of the company without his cooperation would go nowhere.
- glitchc 6y ago
  In the absence of an explicit contract, the courts will take the typical approach or what would be reasonably accepted for that industry. Fairness of compensation also matters. If compensation seems reasonable for a work for hire, then that standard will be applied. If the payout is fairly consistent then it could look like a salary. Engineers cannot hold up sales of companies unless they have an ownership stake. They could dispute IP ownership but even then the sale would go through usually. If majority of the voting directorship is in favour of the sale, there’s nothing to stop it. The engineer could file a lien in that case. Perhaps that might give the buyer pause, or they could decide its easy enough to fight or pay out and may go through with it anyways. Liens do not block a sale if the buyer is willing to assume the risk.

trhway 6y ago

>As per the contract, the engineer's labour is being compensated by wages and benefits. All the fruits of his/her labour are solely owned by the company. This is at least true in North America. [IANAL] Labour - yes. My understanding though is that despite wages, etc. the copyright/IP belongs to the engineer until there is an assignment agreement in place - that piece of paper we all sign coming to a new job and every time again when our patents get filed. If it were in the US and the OP doesn't have such assignment signed, i'd think the sale of the company without his cooperation would go nowhere.

glitchc 6y ago
In the absence of an explicit contract, the courts will take the typical approach or what would be reasonably accepted for that industry. Fairness of compensation also matters. If compensation seems reasonable for a work for hire, then that standard will be applied. If the payout is fairly consistent then it could look like a salary. Engineers cannot hold up sales of companies unless they have an ownership stake. They could dispute IP ownership but even then the sale would go through usually. If majority of the voting directorship is in favour of the sale, there’s nothing to stop it. The engineer could file a lien in that case. Perhaps that might give the buyer pause, or they could decide its easy enough to fight or pay out and may go through with it anyways. Liens do not block a sale if the buyer is willing to assume the risk.