Clarity on employment terms is essential to protect careers. In this column, Kaye/Bassman’s Michael Pietrack speaks to employment attorney Howard Matalon, JD, partner at OlenderFeldman, on how to evaluate the fine print of an employment agreement.
Welcome to Leadership Lab, a column dedicated to biotech executives aiming to enhance their leadership skills and advance their careers. Every other month, Michael Pietrack, the practice lead for Kaye/Bassman’s life sciences recruiting team and host of The Pharmaverse Podcast, shares a valuable leadership insight.
Pharma executives negotiate complex situations for a living, yet some step into new roles without asking the important questions that may protect their own careers. In an industry defined by restructurings, acquisitions, and rapid pivots, the fine print of an employment agreement can matter more than the headline compensation number.
To clarify where leaders should focus, I spoke with employment attorney Howard Matalon, JD, partner at OlenderFeldman, who has advised executives for more than three decades. He believes every C-suite executive should ask four essential questions before signing.
Executives talk often about their “golden parachute,” but many never confirm whether the parachute is truly packed. Matalon’s first step is simple: “Ask whether the company has a severance plan and a change in control plan.” If they exist, confirm in writing that you are covered. If they do not, Matalon advises that the protections should be written directly into your offer.
1. What severance and change in control protection do I actually have?
Those protections include months of salary, bonus treatment, health benefits continuation, and equity acceleration. “Industry standard severance is six months for a VP, nine for an SVP, and twelve months for a C-suite,” Matalon said. “If you are in the upper ranks and getting a severance under six months, that’s an area that should be negotiated.”
Some companies have a “double trigger” change in control structure, where the company must be sold and you must lose your job within a set period before unvested equity accelerates. That can disadvantage newer executives. “Everyone else is getting to cash out, and you still have three years of vesting ahead of you,” Matalon explained. A “single trigger” acceleration at the time of sale is now rare, he added. Companies often view it as an unearned windfall early in an executive’s tenure. This is why it’s important to understand the distinction and not make assumptions.
2. How are “cause” and “good reason” defined, and do I have a cure period?
If severance is the parachute, cause and good reason determine whether you can pull the ripcord. Cause should be spelled out and reserved for serious misconduct such as willful insubordination or breaches of confidentiality. It should not include vague statements like underperformance or for any reason. “You should never accept a cause provision that is vague or overly broad in its definition,” Matalon noted. “That becomes a loophole around paying a severance.”
A cure period is equally important. Without it, the company can terminate immediately for cause, eliminating severance and equity immediately . “Without a cure period, they can just fire you on the spot and you get nothing,” he said. With a cure period, the executive must be given written notice and time to fix the issue, which protects against misunderstandings, inadvertent data handling mistakes, or the inability to complete a performance plan. Not all cause conditions are curable, of course, but executives should bargain to obtain the right to cure wherever possible.
Good reason is the executive’s counterpart to cause. It allows the executive to trigger severance when the company materially changes the deal. A strong good reason clause covers reductions in role, reporting line changes, salary reductions, or bonus losses, as well as breaches of the company’s obligations and in some cases where the company directs executives to engage in unlawful conduct After an acquisition, this clause is critical. If a C-suite leader becomes a lower-level leader after a sale, good reason may allow immediate exit with protections. Matalon calls it “the most powerful tool in the executive’s arsenal.”
3. What hidden risks sit in my role, bonus, and protection terms?
Many of the biggest problems Matalon sees stem from details executives overlook in the offer letter. “There are three primary components to every offer,” he said. “Role, compensation, and what you are risking or might have to forfeit.”
Role includes the clarity of your title, scope, and reporting line. If vague, they can be changed later without breaching the agreement.
Compensation requires careful attention. Bonus structures are frequent trouble spots. “Up to 50 percent also means zero,” Matalon cautioned. Another issue is timing. Many bonuses are paid in the first quarter of the next year. If the agreement requires you to be employed on the payout date, you can lose an earned bonus if the company terminates you beforehand. This provision appears often and should be addressed before accepting the role.
Executives should also secure indemnification under the company’s directors’ and officers’ policy in writing, not just rely on company bylaws. Additionally, many offer letters omit any commitment to annual salary review. For C-suite leaders, that review should be written into the agreement.
These items rarely emerge during verbal negotiations, but they determine how protected or exposed an executive is long after they join.
4. How will this non-compete affect my next move, and am I being compensated to sit out?
Non-compete and non-solicit clauses can define a leader’s next chapter. In many states, they remain enforceable even if you are fired. “You really have to think long and hard about these provisions and how they affect your career trajectory,” Matalon said.
Executives should first understand how “competing business” is defined. If the company operates across multiple therapeutic areas, a broad definition can block opportunities for a year or more. One solution is a carve-out that allows an executive to work for a discrete group or division of a large pharma company that does not compete in the same area. Matalon notes that this approach is growing more common as major pharma companies expand into many unrelated fields.
Non-compete duration and severance period should also align. Historically, a twelve-month non-compete meant twelve months of pay. As salaries have increased, companies have become reluctant to match that parity, but it remains the correct starting point. If the company insists on a long non-compete with limited severance, the executive can negotiate a shorter restriction or a longer severance period. If the company stops paying severance that supports the non-compete, this may be a breach, but the executive must give formal notice before treating it that way.
Ensure Clarity, Negotiate Your Future
A strong employment agreement is not about mistrust. It is about clarity. Severance and change in control terms, the definitions of cause and good reason, the structure of bonuses and role protections, and the scope of a non-compete determine how an executive lands when the company pivots, restructures, or sells.
As Matalon emphasizes, executives cannot control every element of these agreements, but they can control whether they understand and negotiate the parts that are truly negotiable. In a high-stakes industry like pharma, that understanding is essential.
This article is for general informational purposes only and does not constitute legal advice. Executives should consult their own employment attorney before making decisions based on these concepts or examples.
