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Hi Legal Beagles. Looking for a little advice please.
Over 6 years ago, I was persuaded to join a tech start-up and left my very senior management consultant role at a big international corporate. I had young children and needed a change and a new challenge. At the time, being part of a very small team, with a very good idea, with the opportunity to shape something quite revolutionary in health technology was very attractive. I was prepared to take the salary hit at the time. I was awarded a few share options that, if the company does well, I'll be rewarded. it was gamble, but a gamble that was well worth it at the time.
In my contract of employment, there is this clause...."Your salary will be reviewed at 6 months and thereafter annually and may be increased from time to time at the Company’s discretion without affecting the other terms of your employment"
I'll cut to the chase. I am an exec director of the business, have a (questionable) CEO who is an academic (not commercial) and the company is both profitable, has cash reserves (over £1.5m in the bank) and has moved from tech start-up to established company, with national contracts with the NHS and social care sectors. I have been instrumental in the business success.
However....In spite of incredibly positive and sustainable growth, doubling revenues year on year, my requests for a salary review have been completely ignored. I have had countless conversations with the CEO, written countless emails and the answer is....yes, I will be undertaking the review shortly.
It never happens.
It was my understanding from the recruiting CEO (who has now moved on to the board), that when cash allowed, the 50% salary hit I took to join the business would be matched and bonuses paid to make up for lost earnings.
I am in a dilemma. I have many other employment options available that would pay the 6 figure salary I can command, however....the terms of my share options are clear. If I leave the business, I lose my options. To date, at current valuation levels, if a buyer were to take over the company, the shares have a value in excess of nearly £400k (after tax).
We are at least 3 years away from a sale I believe. The board want the valuation to be higher, they want us to be more profitable and they want more investors before exit. This will dilute my share options but we are "promised" that the investment will add to the long term potential returns.
What to do. I am not alone. All the ED's in the business (there ar 5 of us) are in a similar predicament with zero salary reviews or bonuses paid. The staff we manager are now paid only slightly less than we are! To not have had a single percentage increase in salary in close to 7 years is, in my option, not fair and disrespectful of the effort and graft I have put in to make the business what it is today.
So the question....Do I have any rights to question this legally given the clause in the contract, or...(as I suspect is the answer), do I have to put up or get out.
Any help or advice would be enormously appreciated.
Thank you.
Over 6 years ago, I was persuaded to join a tech start-up and left my very senior management consultant role at a big international corporate. I had young children and needed a change and a new challenge. At the time, being part of a very small team, with a very good idea, with the opportunity to shape something quite revolutionary in health technology was very attractive. I was prepared to take the salary hit at the time. I was awarded a few share options that, if the company does well, I'll be rewarded. it was gamble, but a gamble that was well worth it at the time.
In my contract of employment, there is this clause...."Your salary will be reviewed at 6 months and thereafter annually and may be increased from time to time at the Company’s discretion without affecting the other terms of your employment"
I'll cut to the chase. I am an exec director of the business, have a (questionable) CEO who is an academic (not commercial) and the company is both profitable, has cash reserves (over £1.5m in the bank) and has moved from tech start-up to established company, with national contracts with the NHS and social care sectors. I have been instrumental in the business success.
However....In spite of incredibly positive and sustainable growth, doubling revenues year on year, my requests for a salary review have been completely ignored. I have had countless conversations with the CEO, written countless emails and the answer is....yes, I will be undertaking the review shortly.
It never happens.
It was my understanding from the recruiting CEO (who has now moved on to the board), that when cash allowed, the 50% salary hit I took to join the business would be matched and bonuses paid to make up for lost earnings.
I am in a dilemma. I have many other employment options available that would pay the 6 figure salary I can command, however....the terms of my share options are clear. If I leave the business, I lose my options. To date, at current valuation levels, if a buyer were to take over the company, the shares have a value in excess of nearly £400k (after tax).
We are at least 3 years away from a sale I believe. The board want the valuation to be higher, they want us to be more profitable and they want more investors before exit. This will dilute my share options but we are "promised" that the investment will add to the long term potential returns.
What to do. I am not alone. All the ED's in the business (there ar 5 of us) are in a similar predicament with zero salary reviews or bonuses paid. The staff we manager are now paid only slightly less than we are! To not have had a single percentage increase in salary in close to 7 years is, in my option, not fair and disrespectful of the effort and graft I have put in to make the business what it is today.
So the question....Do I have any rights to question this legally given the clause in the contract, or...(as I suspect is the answer), do I have to put up or get out.
Any help or advice would be enormously appreciated.
Thank you.
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