Executive Compensation

 

Departed Executives Resolve Commission / Bonus Dispute

 

The Challenge.  Two Sales Executives resigned to work for a competitor after their company was acquired, and “New Company” changed the compensation structure.  New Company refused to pay Sales Executives additional commissions and bonuses because it had changed the compensation plan before Sales Executives left.  

 

Overcoming the Challenge.  The mediation took place early in the case, and it was clear to me from the mediation statements that New Company did not understand precisely which commissions and bonuses Sales Executives were claiming, or their theory for why they were entitled to them.  So, at my suggestion, Sales Executives’ counsel gave a more detailed explanation in our joint session of the claim and its basis.

 

In probing the Sales Executives’ claim further during an initial caucus, I gained more insight and was able to share my observations with New Company.  This interaction had the effect of convincing New Company’s representatives that their defense was not as ironclad as they’d assumed, and that there was risk for the interim period between when Old Company’s compensation plan ended and New Company’s plan started.  New Company had come with little settlement authority, and I suggested that we stop for the day, give New Company to reassess, and then resume if there was a chance of progress.  During the hiatus, I had a conference call with New Company’s decision-making team.  

 

The Result.  The enhanced decision-making authority of New Company representatives at the second mediation session led to a settlement of the case.