{"id":5499,"date":"2026-06-19T17:29:53","date_gmt":"2026-06-19T15:29:53","guid":{"rendered":"https:\/\/graciacalbet.com\/blog\/senior-executive-contract-severance-protection-2026\/"},"modified":"2026-06-19T17:29:53","modified_gmt":"2026-06-19T15:29:53","slug":"senior-executive-contract-severance-protection-2026","status":"publish","type":"post","link":"https:\/\/graciacalbet.com\/en\/blog\/senior-executive-contract-severance-protection-2026\/","title":{"rendered":"9 clauses in a senior executive contract with severance protection in 2026"},"content":{"rendered":"<article style=\"width:100%;max-width:1180px;box-sizing:border-box;margin:0 auto;padding:0 clamp(18px,4vw,30px) clamp(40px,8vw,72px);color:#2b2b2b;font-family:Raleway,Arial,sans-serif;font-size:clamp(16px,3.8vw,18px);line-height:1.72;overflow-wrap:anywhere;word-break:break-word;\">\n<header style=\"position:relative;margin:0 0 clamp(34px,7vw,58px);padding:clamp(32px,8vw,78px) 0 clamp(28px,7vw,54px);text-align:center;border-bottom:1px solid #e6e6e6;overflow:hidden;\">\n    <img decoding=\"async\" style=\"position:absolute;right:-8%;top:4%;width:min(460px,72vw);max-width:none;opacity:.045;z-index:0;\" src=\"https:\/\/graciacalbet.com\/images\/graciacalbet-logo-transparent.svg\" alt=\"\"><\/p>\n<div style=\"position:relative;z-index:1;max-width:1040px;margin:0 auto;\">\n<p style=\"margin:0 0 18px;color:#797979;font-size:13px;font-weight:700;letter-spacing:.16em;text-transform:uppercase;\">Senior executives and key personnel<\/p>\n<h1 style=\"max-width:1020px;margin:0 auto 20px;color:#000;font-family:PlayfairDisplay,Georgia,serif;font-size:clamp(34px,7vw,68px);line-height:1;font-weight:600;overflow-wrap:break-word;word-break:normal;\">9 clauses in a senior executive contract with severance protection in 2026<\/h1>\n<p style=\"max-width:860px;margin:0 auto 22px;color:#2b2b2b;font-size:clamp(18px,4.2vw,22px);line-height:1.55;\">A <strong style=\"color:#000;font-weight:800;\">senior executive contract with severance protection<\/strong> is not only a high termination payment. It must organise a relationship based on trust, autonomy and responsibility, where the executive may have access to strategic information, decision-making powers, clients, teams, bonuses, post-contractual covenants and reputational risk.<\/p>\n<div style=\"display:flex;flex-wrap:wrap;gap:10px 18px;align-items:center;justify-content:center;margin:0;color:#797979;font-size:14px;line-height:1.4;\">\n        <span style=\"display:inline-block;\">Last reviewed: 25 May 2026<\/span><br \/>\n        <span style=\"display:inline-block;width:28px;height:1px;background:#d7d7d7;\"><\/span><br \/>\n        <span style=\"display:inline-block;\">Strategic employment, corporate and tax law<\/span>\n      <\/div>\n<\/p><\/div>\n<\/header>\n<figure style=\"max-width:960px;margin:0 auto clamp(34px,7vw,52px);padding:0;\">\n    <img decoding=\"async\" style=\"display:block;width:100%;max-height:clamp(300px,58vw,520px);object-fit:cover;background:#f3f3f3;\" src=\"https:\/\/graciacalbet.com\/images\/graciacalbet-office.jpg\" alt=\"Review of a senior executive contract and corporate documentation\"><figcaption style=\"margin:0;padding:12px 0 0;color:#797979;font-size:14px;line-height:1.45;border-top:1px solid #e6e6e6;\">A senior executive contract should coordinate severance, powers, bonus, confidentiality, exit mechanics and tax treatment.<\/figcaption><\/figure>\n<div style=\"display:grid;grid-template-columns:repeat(auto-fit,minmax(min(100%,260px),1fr));gap:0;margin:0 0 clamp(30px,6vw,46px);border-top:1px solid #000;border-bottom:1px solid #e6e6e6;\">\n<p style=\"margin:0;padding:18px 18px 18px 0;color:#2b2b2b;font-size:15px;line-height:1.5;border-bottom:1px solid #e6e6e6;\"><strong style=\"display:block;margin:0 0 4px;color:#000;font-weight:800;\">Focus<\/strong> Executives, partners, companies, boards and family businesses.<\/p>\n<p style=\"margin:0;padding:18px;color:#2b2b2b;font-size:15px;line-height:1.5;border-bottom:1px solid #e6e6e6;\"><strong style=\"display:block;margin:0 0 4px;color:#000;font-weight:800;\">Main risk<\/strong> Agreeing a payment without defining cause, bonus, powers and tax treatment.<\/p>\n<p style=\"margin:0;padding:18px 0 18px 18px;color:#2b2b2b;font-size:15px;line-height:1.5;border-bottom:1px solid #e6e6e6;\"><strong style=\"display:block;margin:0 0 4px;color:#000;font-weight:800;\">Useful decision<\/strong> Review the contract before signing, renewing or implementing an exit.<\/p>\n<\/p><\/div>\n<nav aria-label=\"Table of contents\" style=\"max-width:860px;margin:0 auto clamp(30px,6vw,48px);padding:0;border-top:1px solid #000;border-bottom:1px solid #e6e6e6;\">\n<p style=\"margin:0;padding:16px 0 12px;color:#000;font-size:13px;font-weight:800;letter-spacing:.16em;text-transform:uppercase;\">Article contents<\/p>\n<ol style=\"display:block;margin:0;padding:0;color:#2b2b2b;font-size:clamp(15px,3.8vw,16px);line-height:1.45;list-style:none;\">\n<li style=\"margin:0;padding:14px 0;border-top:1px solid #e6e6e6;\"><a style=\"display:flex;gap:14px;color:#2b2b2b;font-weight:700;text-decoration:none;overflow-wrap:anywhere;word-break:break-word;\" href=\"#senior-executive-contract-clauses\"><span style=\"color:#797979;font-weight:800;\">01<\/span><span>9 clauses to review in a protected senior executive contract<\/span><\/a><\/li>\n<li style=\"margin:0;padding:14px 0;border-top:1px solid #e6e6e6;\"><a style=\"display:flex;gap:14px;color:#2b2b2b;font-weight:700;text-decoration:none;overflow-wrap:anywhere;word-break:break-word;\" href=\"#what-severance-protection-means\"><span style=\"color:#797979;font-weight:800;\">02<\/span><span>What severance protection means in senior management<\/span><\/a><\/li>\n<li style=\"margin:0;padding:14px 0;border-top:1px solid #e6e6e6;\"><a style=\"display:flex;gap:14px;color:#2b2b2b;font-weight:700;text-decoration:none;overflow-wrap:anywhere;word-break:break-word;\" href=\"#clauses-risks-documents-table\"><span style=\"color:#797979;font-weight:800;\">03<\/span><span>Table of clauses, risks and documents to review<\/span><\/a><\/li>\n<li style=\"margin:0;padding:14px 0;border-top:1px solid #e6e6e6;\"><a style=\"display:flex;gap:14px;color:#2b2b2b;font-weight:700;text-decoration:none;overflow-wrap:anywhere;word-break:break-word;\" href=\"#senior-executive-protection-errors\"><span style=\"color:#797979;font-weight:800;\">04<\/span><span>Common mistakes when negotiating executive protection<\/span><\/a><\/li>\n<li style=\"margin:0;padding:14px 0;border-top:1px solid #e6e6e6;\"><a style=\"display:flex;gap:14px;color:#2b2b2b;font-weight:700;text-decoration:none;overflow-wrap:anywhere;word-break:break-word;\" href=\"#graciacalbet-senior-executive-protection\"><span style=\"color:#797979;font-weight:800;\">05<\/span><span>How Gr\u00e0ciaCalbet can help<\/span><\/a><\/li>\n<li style=\"margin:0;padding:14px 0;border-top:1px solid #e6e6e6;\"><a style=\"display:flex;gap:14px;color:#2b2b2b;font-weight:700;text-decoration:none;overflow-wrap:anywhere;word-break:break-word;\" href=\"#frequently-asked-questions\"><span style=\"color:#797979;font-weight:800;\">06<\/span><span>Frequently Asked Questions (FAQs)<\/span><\/a><\/li>\n<\/ol>\n<\/nav>\n<div style=\"margin:0 0 clamp(30px,6vw,44px);padding:clamp(20px,5vw,28px);background:#f3f3f3;border-left:2px solid #000;\">\n<p style=\"margin:0 0 14px;color:#000;font-weight:800;\">These are the 9 senior executive contract severance protection clauses we recommend reviewing before signing:<\/p>\n<ol style=\"display:grid;grid-template-columns:repeat(auto-fit,minmax(min(100%,300px),1fr));gap:10px 22px;margin:0;padding:0;list-style:none;color:#2b2b2b;\">\n<li style=\"margin:0;padding:0 0 10px;border-bottom:1px solid #d7d7d7;\"><strong style=\"color:#000;font-weight:800;\">01<\/strong> Correct classification of the senior management relationship<\/li>\n<li style=\"margin:0;padding:0 0 10px;border-bottom:1px solid #d7d7d7;\"><strong style=\"color:#000;font-weight:800;\">02<\/strong> Severance payment and the events that trigger it<\/li>\n<li style=\"margin:0;padding:0 0 10px;border-bottom:1px solid #d7d7d7;\"><strong style=\"color:#000;font-weight:800;\">03<\/strong> Notice, employer withdrawal and exit without cause<\/li>\n<li style=\"margin:0;padding:0 0 10px;border-bottom:1px solid #d7d7d7;\"><strong style=\"color:#000;font-weight:800;\">04<\/strong> Non-compete, non-solicitation and financial compensation<\/li>\n<li style=\"margin:0;padding:0 0 10px;border-bottom:1px solid #d7d7d7;\"><strong style=\"color:#000;font-weight:800;\">05<\/strong> Confidentiality, trade secrets and sensitive information<\/li>\n<li style=\"margin:0;padding:0 0 10px;border-bottom:1px solid #d7d7d7;\"><strong style=\"color:#000;font-weight:800;\">06<\/strong> Bonus, variable remuneration and measurable targets<\/li>\n<li style=\"margin:0;padding:0 0 10px;border-bottom:1px solid #d7d7d7;\"><strong style=\"color:#000;font-weight:800;\">07<\/strong> Retention, permanence and repayment of incentives<\/li>\n<li style=\"margin:0;padding:0 0 10px;border-bottom:1px solid #d7d7d7;\"><strong style=\"color:#000;font-weight:800;\">08<\/strong> Powers, conflicts of interest and management liability<\/li>\n<li style=\"margin:0;padding:0 0 10px;border-bottom:1px solid #d7d7d7;\"><strong style=\"color:#000;font-weight:800;\">09<\/strong> Agreed exit, change of control and tax treatment<\/li>\n<\/ol><\/div>\n<p style=\"margin:0 0 18px;\">A <strong style=\"color:#000;font-weight:800;\">senior executive contract with severance protection<\/strong> is not only a clause that promises a large payment. It should define the real legal nature of the relationship, the executive&#8217;s autonomy, the scope of their powers and the economic consequences if trust breaks down.<\/p>\n<p style=\"margin:0 0 18px;\">For the executive, a protected contract strengthens the negotiating position if there is a change of control, a loss of confidence, a restructuring or an exit without cause. For the company, the contract should protect strategic assets without creating obligations that are ambiguous, disproportionate or difficult to defend.<\/p>\n<p style=\"margin:0 0 18px;\">The key point is precision. A poorly drafted protection clause can lead to disputes about severance, accrued bonus, non-compete covenants, confidentiality, stock options, permanence clauses or taxation. In general management, executive director, partner-manager or family business roles, the review should connect employment, corporate, tax and governance issues.<\/p>\n<p style=\"margin:0 0 18px;\">This guide explains which clauses to review, where disputes usually arise and how to approach an agreed exit before the professional or corporate relationship deteriorates.<\/p>\n<h2 id=\"senior-executive-contract-clauses\" style=\"margin:clamp(48px,9vw,68px) 0 20px;padding-top:20px;border-top:1px solid #000;color:#000;font-family:PlayfairDisplay,Georgia,serif;font-size:clamp(27px,5.8vw,42px);line-height:1.04;font-weight:600;\">9 clauses to review in a protected senior executive contract<\/h2>\n<h3 style=\"margin:30px 0 12px;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(18px,4.6vw,22px);line-height:1.25;font-weight:800;\">1. Correct classification of the senior management relationship<\/h3>\n<p style=\"margin:0 0 16px;\">Before protecting a contract, the first step is confirming whether the relationship is truly a special senior management employment relationship under Spanish law. <a style=\"color:#000;font-weight:700;text-decoration:underline;text-decoration-color:#797979;text-underline-offset:4px;\" href=\"https:\/\/www.boe.es\/buscar\/act.php?id=BOE-A-1985-17006\" target=\"_blank\" rel=\"noopener\">Royal Decree 1382\/1985<\/a> refers to personnel who exercise powers inherent to the legal ownership of the company, relating to its general objectives, with autonomy and full responsibility, limited only by direct instructions from the superior corporate body.<\/p>\n<p style=\"margin:0 0 16px;\">Not every high salary or managerial title is enough. A department director may still fall under ordinary employment law if they do not exercise general powers or if they remain subject to constant operational instructions. This classification affects termination, indemnity, applicable rules and the room for contractual agreement.<\/p>\n<div style=\"margin:24px 0;padding:20px 22px;background:#f3f3f3;border:1px solid #e6e6e6;border-left:2px solid #000;\">\n<p style=\"margin:0;color:#2b2b2b;\"><strong style=\"color:#000;font-weight:800;\">Recommended action:<\/strong> review powers, organisation charts, board minutes, real functions, hierarchy, contract-signing authority, committee participation and autonomy before drafting severance protection.<\/p>\n<\/p><\/div>\n<h3 style=\"margin:30px 0 12px;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(18px,4.6vw,22px);line-height:1.25;font-weight:800;\">2. Severance payment and the events that trigger it<\/h3>\n<p style=\"margin:0 0 16px;\">The severance clause must define how much is paid, when it is paid and which event activates it. It is not enough to write a generic figure. The contract should distinguish between employer withdrawal, unfair dismissal, employer breach, change of control, substantial loss of functions, agreed exit and disciplinary termination.<\/p>\n<p style=\"margin:0 0 16px;\">Royal Decree 1382\/1985 allows the senior executive to receive the indemnities agreed in the contract. If there is no agreement, it sets default rules for certain scenarios. That is why the contractual wording is often more important than the headline number.<\/p>\n<p style=\"margin:0 0 16px;\">A well-drafted clause should avoid doubts about reference salary, whether bonus is included, pending variable pay, benefits in kind, equity, recognised seniority and compatibility with other payments.<\/p>\n<h3 style=\"margin:30px 0 12px;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(18px,4.6vw,22px);line-height:1.25;font-weight:800;\">3. Notice, employer withdrawal and exit without cause<\/h3>\n<p style=\"margin:0 0 16px;\">Senior management relationships are based on trust. The employer may therefore terminate by withdrawal, provided the decision is notified in writing and the agreed or statutory notice is respected. The clause should regulate what happens if notice is not observed, whether it can be replaced by payment, whether the executive is released from work and how powers, access and handover are managed.<\/p>\n<p style=\"margin:0 0 16px;\">Many disputes arise because the company wants an immediate exit while the executive considers that amounts remain outstanding. The contract should anticipate that situation: effective date, return of devices, revocation of powers, client communications, settlement, reinforced confidentiality and garden leave if agreed.<\/p>\n<h3 style=\"margin:30px 0 12px;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(18px,4.6vw,22px);line-height:1.25;font-weight:800;\">4. Non-compete, non-solicitation and financial compensation<\/h3>\n<p style=\"margin:0 0 16px;\">Non-compete and non-solicitation covenants must be clear, proportionate and compensated where required. They should protect a real business interest: strategic clients, trade secrets, technology, know-how, financial information or expansion plans.<\/p>\n<p style=\"margin:0 0 16px;\">The clause should define duration, territory, prohibited activity, companies affected, compensation, consequences of breach and compatibility with the executive&#8217;s right to work. A broad prohibition without a precise perimeter may be difficult to defend.<\/p>\n<h3 style=\"margin:30px 0 12px;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(18px,4.6vw,22px);line-height:1.25;font-weight:800;\">5. Confidentiality, trade secrets and sensitive information<\/h3>\n<p style=\"margin:0 0 16px;\">Confidentiality in senior management cannot be a standard clause copied from an ordinary employment contract. A senior executive may know margins, commercial strategy, client lists, M&amp;A transactions, restructuring plans, litigation, debt, pricing formulas, employment data and succession plans.<\/p>\n<p style=\"margin:0 0 16px;\">The clause should define what is confidential, how long the obligation lasts, which uses are prohibited and how documents, devices, copies, emails, cloud files and personal storage are returned or deleted. It should also be coordinated with the Spanish <a style=\"color:#000;font-weight:700;text-decoration:underline;text-decoration-color:#797979;text-underline-offset:4px;\" href=\"https:\/\/www.boe.es\/buscar\/act.php?id=BOE-A-2019-2364\" target=\"_blank\" rel=\"noopener\">Trade Secrets Act<\/a>, data protection duties, intellectual property and corporate duties where the executive is a director or board member.<\/p>\n<h3 style=\"margin:30px 0 12px;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(18px,4.6vw,22px);line-height:1.25;font-weight:800;\">6. Bonus, variable remuneration and measurable targets<\/h3>\n<p style=\"margin:0 0 16px;\">Bonus clauses are often the most contentious part of the contract. The agreement should explain whether the bonus is discretionary or rules-based, which targets activate it, who measures them, when it accrues and what happens if the exit occurs before the year closes.<\/p>\n<p style=\"margin:0 0 16px;\">It is also important to review multi-year bonuses, retention incentives, phantom shares, stock options, carried interest, internal earn-outs and targets linked to EBITDA, sales, financing milestones or post-acquisition integration. A poorly defined incentive can become a significant claim if the company decides to remove the executive before the variable pay is settled.<\/p>\n<h3 style=\"margin:30px 0 12px;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(18px,4.6vw,22px);line-height:1.25;font-weight:800;\">7. Retention, permanence and repayment of incentives<\/h3>\n<p style=\"margin:0 0 16px;\">Permanence clauses may be used when the company invests in training, relocation, signing bonuses, retention plans or extraordinary incentives. They should state the investment that justifies permanence, its duration, what happens if the executive leaves early and how any repayment is calculated.<\/p>\n<p style=\"margin:0 0 16px;\">For the executive, the obligation must remain reasonable and compatible with relevant changes in functions, control or business strategy. For the company, it should protect a real investment, not operate as a vague penalty.<\/p>\n<h3 style=\"margin:30px 0 12px;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(18px,4.6vw,22px);line-height:1.25;font-weight:800;\">8. Powers, conflicts of interest and management liability<\/h3>\n<p style=\"margin:0 0 16px;\">If the executive also acts as director, board member, attorney-in-fact or shareholder, the review cannot stop at the employment contract. The Spanish <a style=\"color:#000;font-weight:700;text-decoration:underline;text-decoration-color:#797979;text-underline-offset:4px;\" href=\"https:\/\/www.boe.es\/buscar\/act.php?id=BOE-A-2010-10544\" target=\"_blank\" rel=\"noopener\">Companies Act<\/a> may become relevant for duties of loyalty, conflicts of interest, remuneration and liability.<\/p>\n<p style=\"margin:0 0 16px;\">The contract should be coordinated with powers of attorney, board appointments, D&amp;O insurance, shareholder agreements, approval rules, related-party transactions and internal policies. The exit may require corporate minutes, revocation of powers, registry filings, bank communications and a separate liability review.<\/p>\n<h3 style=\"margin:30px 0 12px;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(18px,4.6vw,22px);line-height:1.25;font-weight:800;\">9. Agreed exit, change of control and tax treatment<\/h3>\n<p style=\"margin:0 0 16px;\">An agreed exit should define economic settlement, tax treatment, confidentiality, non-disparagement, references, handover, corporate resignations, bonus, equity and pending expenses. It should also state whether a change of control activates severance automatically, only if the executive is dismissed, or only if there is a relevant change in functions.<\/p>\n<p style=\"margin:0 0 16px;\">The tax cost should be reviewed before signing. Severance, deferred payments, benefits in kind and post-contractual compensation may have different treatment under Spanish personal income tax rules and withholding practice. When the amount is material, the legal and tax review should move together.<\/p>\n<h2 id=\"what-severance-protection-means\" style=\"margin:clamp(48px,9vw,68px) 0 20px;padding-top:20px;border-top:1px solid #000;color:#000;font-family:PlayfairDisplay,Georgia,serif;font-size:clamp(27px,5.8vw,42px);line-height:1.04;font-weight:600;\">What severance protection means in senior management<\/h2>\n<p style=\"margin:0 0 16px;\">In practice, severance protection is a contractual framework that anticipates how the relationship will end if trust is lost. It can protect the executive from an abrupt exit, but it can also protect the company by defining confidentiality, handover, non-compete obligations and the economic perimeter of the termination.<\/p>\n<p style=\"margin:0 0 16px;\">The protection should not be isolated from the rest of the documents. Board minutes, powers of attorney, shareholder agreements, remuneration policies, bonus plans, tax treatment and internal authorisations can all affect the enforceability and cost of the arrangement.<\/p>\n<div style=\"margin:24px 0;padding:20px 22px;background:#f3f3f3;border:1px solid #e6e6e6;border-left:2px solid #000;\">\n<p style=\"margin:0;color:#2b2b2b;\">The answer depends on the facts. Before signing, it is important to distinguish between ordinary employment, special senior management, board office and shareholder status, because each layer may create different rights, duties and risks.<\/p>\n<\/p><\/div>\n<h2 id=\"clauses-risks-documents-table\" style=\"margin:clamp(48px,9vw,68px) 0 20px;padding-top:20px;border-top:1px solid #000;color:#000;font-family:PlayfairDisplay,Georgia,serif;font-size:clamp(27px,5.8vw,42px);line-height:1.04;font-weight:600;\">Table of clauses, risks and documents to review<\/h2>\n<div style=\"overflow-x:auto;margin:24px 0;border:1px solid #e6e6e6;\">\n<table style=\"width:100%;min-width:760px;border-collapse:collapse;background:#fff;\">\n<thead>\n<tr>\n<th style=\"padding:14px;background:#000;color:#fff;text-align:left;font-weight:800;border-bottom:1px solid #e6e6e6;\">Clause<\/th>\n<th style=\"padding:14px;background:#000;color:#fff;text-align:left;font-weight:800;border-bottom:1px solid #e6e6e6;\">Main risk<\/th>\n<th style=\"padding:14px;background:#000;color:#fff;text-align:left;font-weight:800;border-bottom:1px solid #e6e6e6;\">Documents to review<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td style=\"padding:14px;border-bottom:1px solid #e6e6e6;vertical-align:top;\">Classification<\/td>\n<td style=\"padding:14px;border-bottom:1px solid #e6e6e6;vertical-align:top;\">Applying senior management rules where ordinary employment should apply.<\/td>\n<td style=\"padding:14px;border-bottom:1px solid #e6e6e6;vertical-align:top;\">Functions, powers, reporting line, board minutes and organisation chart.<\/td>\n<\/tr>\n<tr>\n<td style=\"padding:14px;border-bottom:1px solid #e6e6e6;vertical-align:top;\">Severance<\/td>\n<td style=\"padding:14px;border-bottom:1px solid #e6e6e6;vertical-align:top;\">Dispute about trigger event, reference salary or compatible payments.<\/td>\n<td style=\"padding:14px;border-bottom:1px solid #e6e6e6;vertical-align:top;\">Contract, bonus plan, payroll, equity documents and exit draft.<\/td>\n<\/tr>\n<tr>\n<td style=\"padding:14px;border-bottom:1px solid #e6e6e6;vertical-align:top;\">Confidentiality<\/td>\n<td style=\"padding:14px;border-bottom:1px solid #e6e6e6;vertical-align:top;\">Information leakage or an overly generic clause.<\/td>\n<td style=\"padding:14px;border-bottom:1px solid #e6e6e6;vertical-align:top;\">Internal policies, trade secret controls, access rights and devices.<\/td>\n<\/tr>\n<tr>\n<td style=\"padding:14px;border-bottom:1px solid #e6e6e6;vertical-align:top;\">Bonus<\/td>\n<td style=\"padding:14px;border-bottom:1px solid #e6e6e6;vertical-align:top;\">Claim for accrued or proportional variable pay.<\/td>\n<td style=\"padding:14px;border-bottom:1px solid #e6e6e6;vertical-align:top;\">Targets, metrics, board approvals, emails and accounting records.<\/td>\n<\/tr>\n<tr>\n<td style=\"padding:14px;border-bottom:1px solid #e6e6e6;vertical-align:top;\">Change of control<\/td>\n<td style=\"padding:14px;border-bottom:1px solid #e6e6e6;vertical-align:top;\">Unwanted automatic trigger or insufficient protection.<\/td>\n<td style=\"padding:14px;border-bottom:1px solid #e6e6e6;vertical-align:top;\">Shareholder agreement, transaction documents, role description and powers.<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<div style=\"position:relative;margin:clamp(28px,6vw,42px) 0;padding:clamp(22px,5vw,34px);background:#f3f3f3;border-top:1px solid #000;border-bottom:1px solid #e6e6e6;\">\n<div style=\"display:grid;grid-template-columns:repeat(auto-fit,minmax(min(100%,260px),1fr));gap:18px 28px;align-items:center;\">\n<div>\n<p style=\"margin:0 0 8px;color:#797979;font-size:13px;font-weight:800;letter-spacing:.16em;text-transform:uppercase;\">Preventive review<\/p>\n<p style=\"margin:0;color:#000;font-family:PlayfairDisplay,Georgia,serif;font-size:clamp(25px,5.4vw,36px);line-height:1.04;font-weight:600;\">Does the protection depend on an exit or change of control?<\/p>\n<\/p><\/div>\n<div>\n<p style=\"margin:0 0 16px;color:#2b2b2b;line-height:1.62;\">Before closing the contract, it is advisable to check which event activates the payment, which salary is used and how bonus, powers and taxation fit together.<\/p>\n<p style=\"display:flex;flex-wrap:wrap;gap:10px;margin:0;\">\n          <a style=\"display:inline-block;padding:13px 20px;background:#000;color:#fff;border:1px solid #000;font-weight:800;line-height:1;text-decoration:none;\" href=\"https:\/\/graciacalbet.com\/contacto\/\">Request contract review<\/a><br \/>\n          <a style=\"display:inline-block;padding:13px 20px;background:#fff;color:#000;border:1px solid #000;font-weight:800;line-height:1;text-decoration:none;\" href=\"https:\/\/graciacalbet.com\/servicios\/especialidad\/alta-direccion-y-personal-clave\/blindajes-y-clausulas-parachute\/\">View service<\/a>\n        <\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<h2 id=\"senior-executive-protection-errors\" style=\"margin:clamp(48px,9vw,68px) 0 20px;padding-top:20px;border-top:1px solid #000;color:#000;font-family:PlayfairDisplay,Georgia,serif;font-size:clamp(27px,5.8vw,42px);line-height:1.04;font-weight:600;\">Common mistakes when negotiating executive protection<\/h2>\n<h3 style=\"margin:30px 0 12px;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(18px,4.6vw,22px);line-height:1.25;font-weight:800;\">Agreeing a figure without defining the exit event<\/h3>\n<p style=\"margin:0 0 16px;\">A payment may look clear until the decisive question appears: is it paid on employer withdrawal, unfair dismissal, change of control, loss of functions or agreed exit? If the trigger is not defined, the dispute is almost built in.<\/p>\n<h3 style=\"margin:30px 0 12px;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(18px,4.6vw,22px);line-height:1.25;font-weight:800;\">Mixing bonus, severance and permanence<\/h3>\n<p style=\"margin:0 0 16px;\">Bonus, severance and permanence follow different legal and economic logic. Combining them in one clause can create uncertainty about accrual, repayment, compatibility and tax treatment.<\/p>\n<h3 style=\"margin:30px 0 12px;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(18px,4.6vw,22px);line-height:1.25;font-weight:800;\">Using an excessively broad non-compete<\/h3>\n<p style=\"margin:0 0 16px;\">Prohibiting competition in any activity, territory or company may be disproportionate. The clause should protect a specific business interest and provide adequate compensation where appropriate.<\/p>\n<h3 style=\"margin:30px 0 12px;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(18px,4.6vw,22px);line-height:1.25;font-weight:800;\">Forgetting powers and corporate office<\/h3>\n<p style=\"margin:0 0 16px;\">If the executive is a director, board member or attorney-in-fact, the exit does not end with the employment contract. Resignation, revocation of powers, registries, banks, insurance and liability all need review.<\/p>\n<h3 style=\"margin:30px 0 12px;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(18px,4.6vw,22px);line-height:1.25;font-weight:800;\">Not reviewing the tax treatment of the exit package<\/h3>\n<p style=\"margin:0 0 16px;\">The real cost of protection also depends on tax. Severance, bonus, deferred payments, benefits in kind and post-contractual compensation may have different treatment and withholding consequences.<\/p>\n<h2 id=\"graciacalbet-senior-executive-protection\" style=\"margin:clamp(48px,9vw,68px) 0 20px;padding-top:20px;border-top:1px solid #000;color:#000;font-family:PlayfairDisplay,Georgia,serif;font-size:clamp(27px,5.8vw,42px);line-height:1.04;font-weight:600;\">How Gr\u00e0ciaCalbet can help<\/h2>\n<p style=\"margin:0 0 16px;\">At Gr\u00e0ciaCalbet, we advise companies, executives, partners and family business owners on the review and negotiation of <a style=\"color:#000;font-weight:700;text-decoration:underline;text-decoration-color:#797979;text-underline-offset:4px;\" href=\"https:\/\/graciacalbet.com\/servicios\/especialidad\/alta-direccion-y-personal-clave\/\">senior executive and key personnel<\/a> contracts. Our work does not stop at the employment wording: we also review powers, corporate position, tax treatment, bonus, post-contractual covenants, confidentiality and exit strategy.<\/p>\n<p style=\"margin:0 0 16px;\">We can help you assess whether the contract really falls within senior management, draft or negotiate severance protection, structure bonus and permanence clauses, prepare an agreed exit and coordinate the employment review with <a style=\"color:#000;font-weight:700;text-decoration:underline;text-decoration-color:#797979;text-underline-offset:4px;\" href=\"https:\/\/graciacalbet.com\/servicios\/mercantil-y-societario\/\">corporate and commercial law<\/a> where there are powers, board office or shareholder interests.<\/p>\n<p style=\"margin:0 0 16px;\">If you are about to sign, renew or terminate a senior executive contract, it is advisable to review the document before negotiation is closed. You can consult our <a style=\"color:#000;font-weight:700;text-decoration:underline;text-decoration-color:#797979;text-underline-offset:4px;\" href=\"https:\/\/graciacalbet.com\/servicios\/especialidad\/alta-direccion-y-personal-clave\/blindajes-y-clausulas-parachute\/\">severance protection and parachute clauses service<\/a> or request a review through <a style=\"color:#000;font-weight:700;text-decoration:underline;text-decoration-color:#797979;text-underline-offset:4px;\" href=\"https:\/\/graciacalbet.com\/contacto\/\">Gr\u00e0ciaCalbet<\/a>.<\/p>\n<div style=\"position:relative;margin:clamp(28px,6vw,44px) 0;padding:clamp(26px,6vw,42px);background:#000;color:#fff;overflow:hidden;\">\n    <img decoding=\"async\" style=\"position:absolute;right:-6%;bottom:-18%;width:min(520px,82vw);max-width:none;opacity:.12;\" src=\"https:\/\/graciacalbet.com\/images\/graciacalbet-logo-transparent-alt.svg\" alt=\"\"><\/p>\n<div style=\"position:relative;z-index:1;display:grid;grid-template-columns:repeat(auto-fit,minmax(min(100%,280px),1fr));gap:clamp(18px,5vw,34px);align-items:end;\">\n<div>\n<p style=\"margin:0 0 10px;color:#fff;font-size:13px;font-weight:800;letter-spacing:.16em;text-transform:uppercase;\">GR\u00c0CIACALBET<\/p>\n<p style=\"margin:0;color:#fff;font-family:PlayfairDisplay,Georgia,serif;font-size:clamp(28px,6vw,44px);line-height:1.02;font-weight:600;\">Legal and tax review of senior executive contracts<\/p>\n<\/p><\/div>\n<div>\n<p style=\"margin:0 0 18px;color:#f3f3f3;line-height:1.62;\">If the contract includes severance protection, bonus, powers or post-contractual covenants, it should be reviewed before the negotiation or exit is closed.<\/p>\n<p style=\"display:flex;flex-wrap:wrap;gap:10px;margin:0;\">\n          <a style=\"display:inline-block;padding:13px 20px;background:#ffffff;color:#000;border:1px solid #ffffff;font-weight:800;line-height:1;text-decoration:none;\" href=\"https:\/\/graciacalbet.com\/contacto\/\">Request consultation<\/a><br \/>\n          <a style=\"display:inline-block;padding:13px 20px;background:transparent;color:#fff;border:1px solid #ffffff;font-weight:800;line-height:1;text-decoration:none;\" href=\"https:\/\/graciacalbet.com\/servicios\/especialidad\/alta-direccion-y-personal-clave\/blindajes-y-clausulas-parachute\/\">View protection service<\/a>\n        <\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<h2 id=\"frequently-asked-questions\" style=\"margin:clamp(48px,9vw,68px) 0 20px;padding-top:20px;border-top:1px solid #000;color:#000;font-family:PlayfairDisplay,Georgia,serif;font-size:clamp(27px,5.8vw,42px);line-height:1.04;font-weight:600;\">Frequently Asked Questions (FAQs)<\/h2>\n<div style=\"margin:0 0 clamp(32px,7vw,48px);border-top:1px solid #000;\">\n<details style=\"border-bottom:1px solid #e6e6e6;\">\n<summary style=\"cursor:pointer;list-style:none;padding:18px 0;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(17px,4.4vw,21px);line-height:1.25;font-weight:800;\"><span style=\"display:flex;align-items:center;justify-content:space-between;gap:18px;\"><span>What is a severance protection clause in a senior executive contract?<\/span><span aria-hidden=\"true\" style=\"flex:0 0 auto;display:inline-flex;align-items:center;justify-content:center;width:28px;height:28px;border:1px solid #000;color:#000;font-size:20px;line-height:1;font-weight:400;\">+<\/span><\/span><\/summary>\n<p style=\"margin:0 0 18px;color:#2b2b2b;line-height:1.68;\">It is a clause that regulates the economic consequences of an executive&#8217;s exit, usually in cases such as employer withdrawal, unfair dismissal, change of control, loss of functions or agreed exit. It should define amount, reference salary, bonus treatment, payment method and compatibility with other concepts.<\/p>\n<\/details>\n<details style=\"border-bottom:1px solid #e6e6e6;\">\n<summary style=\"cursor:pointer;list-style:none;padding:18px 0;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(17px,4.4vw,21px);line-height:1.25;font-weight:800;\"><span style=\"display:flex;align-items:center;justify-content:space-between;gap:18px;\"><span>Is a company required to agree severance protection with a senior executive?<\/span><span aria-hidden=\"true\" style=\"flex:0 0 auto;display:inline-flex;align-items:center;justify-content:center;width:28px;height:28px;border:1px solid #000;color:#000;font-size:20px;line-height:1;font-weight:400;\">+<\/span><\/span><\/summary>\n<p style=\"margin:0 0 18px;color:#2b2b2b;line-height:1.68;\">Not always. Spanish senior management rules allow indemnities to be agreed, and default rules apply where there is no agreement in certain termination scenarios. Many parties negotiate protection because the executive wants certainty and the company wants an orderly exit framework.<\/p>\n<\/details>\n<details style=\"border-bottom:1px solid #e6e6e6;\">\n<summary style=\"cursor:pointer;list-style:none;padding:18px 0;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(17px,4.4vw,21px);line-height:1.25;font-weight:800;\"><span style=\"display:flex;align-items:center;justify-content:space-between;gap:18px;\"><span>Can a post-contractual non-compete be agreed?<\/span><span aria-hidden=\"true\" style=\"flex:0 0 auto;display:inline-flex;align-items:center;justify-content:center;width:28px;height:28px;border:1px solid #000;color:#000;font-size:20px;line-height:1;font-weight:400;\">+<\/span><\/span><\/summary>\n<p style=\"margin:0 0 18px;color:#2b2b2b;line-height:1.68;\">Yes, but it must be properly limited. The covenant should protect a genuine business interest, define activity, duration, territory and compensation, and avoid restrictions that are broader than the risk being protected.<\/p>\n<\/details>\n<details style=\"border-bottom:1px solid #e6e6e6;\">\n<summary style=\"cursor:pointer;list-style:none;padding:18px 0;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(17px,4.4vw,21px);line-height:1.25;font-weight:800;\"><span style=\"display:flex;align-items:center;justify-content:space-between;gap:18px;\"><span>What happens to bonus if the executive leaves before year-end?<\/span><span aria-hidden=\"true\" style=\"flex:0 0 auto;display:inline-flex;align-items:center;justify-content:center;width:28px;height:28px;border:1px solid #000;color:#000;font-size:20px;line-height:1;font-weight:400;\">+<\/span><\/span><\/summary>\n<p style=\"margin:0 0 18px;color:#2b2b2b;line-height:1.68;\">It depends on the contract, the bonus plan and how the incentive has accrued. The agreement should regulate objectives, accrual, payment date, early exit, proportional rights and documentation of results to reduce disputes.<\/p>\n<\/details>\n<details style=\"border-bottom:1px solid #e6e6e6;\">\n<summary style=\"cursor:pointer;list-style:none;padding:18px 0;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(17px,4.4vw,21px);line-height:1.25;font-weight:800;\"><span style=\"display:flex;align-items:center;justify-content:space-between;gap:18px;\"><span>Should the contract be reviewed if the executive is also a director or shareholder?<\/span><span aria-hidden=\"true\" style=\"flex:0 0 auto;display:inline-flex;align-items:center;justify-content:center;width:28px;height:28px;border:1px solid #000;color:#000;font-size:20px;line-height:1;font-weight:400;\">+<\/span><\/span><\/summary>\n<p style=\"margin:0 0 18px;color:#2b2b2b;line-height:1.68;\">Yes. The review should include corporate office, powers, shareholder agreements, conflicts of interest, D&amp;O insurance, liability and tax treatment. The exit may require corporate steps in addition to the employment termination.<\/p>\n<\/details>\n<details style=\"border-bottom:1px solid #e6e6e6;\">\n<summary style=\"cursor:pointer;list-style:none;padding:18px 0;color:#000;font-family:Raleway,Arial,sans-serif;font-size:clamp(17px,4.4vw,21px);line-height:1.25;font-weight:800;\"><span style=\"display:flex;align-items:center;justify-content:space-between;gap:18px;\"><span>When is the best time to review a senior executive contract?<\/span><span aria-hidden=\"true\" style=\"flex:0 0 auto;display:inline-flex;align-items:center;justify-content:center;width:28px;height:28px;border:1px solid #000;color:#000;font-size:20px;line-height:1;font-weight:400;\">+<\/span><\/span><\/summary>\n<p style=\"margin:0 0 18px;color:#2b2b2b;line-height:1.68;\">Before signing, before accepting senior management functions, before a financing round or sale process, when bonus or retention clauses are introduced, and before negotiating an exit. Reviewing after the conflict has started usually reduces room for manoeuvre.<\/p>\n<\/details><\/div>\n<\/article>\n","protected":false},"excerpt":{"rendered":"<p>A senior executive contract with severance protection is not only a high termination payment. It must organise a relationship based on trust, autonomy and responsibility, where the executive may have access to strategic information, decision-making powers, clients, teams, bonuses, post-contractual covenants and reputational risk.<\/p>\n","protected":false},"author":1,"featured_media":5428,"comment_status":"","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-5499","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"acf":[],"_links":{"self":[{"href":"https:\/\/graciacalbet.com\/en\/wp-json\/wp\/v2\/posts\/5499","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/graciacalbet.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/graciacalbet.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/graciacalbet.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/graciacalbet.com\/en\/wp-json\/wp\/v2\/comments?post=5499"}],"version-history":[{"count":0,"href":"https:\/\/graciacalbet.com\/en\/wp-json\/wp\/v2\/posts\/5499\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/graciacalbet.com\/en\/wp-json\/wp\/v2\/media\/5428"}],"wp:attachment":[{"href":"https:\/\/graciacalbet.com\/en\/wp-json\/wp\/v2\/media?parent=5499"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/graciacalbet.com\/en\/wp-json\/wp\/v2\/categories?post=5499"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/graciacalbet.com\/en\/wp-json\/wp\/v2\/tags?post=5499"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}