should i just take redundancy package

[wig77]

Hi im a director and shareholder of a company and to put a long story short they want to make me redundant and have offered me £10000 and told me to accept it within 7 days or i receive just my statutory 10 weeks pay which equates to just under £3000. I feel it should be nearer the £25000 mark because of the hard work i have put in over the last 10 years and because of the 5% shares i have in the company.

Where do i stand in making a counter offer saying that i will not accept the £10000 but instead will go for £20000???

any advice appreciated

[leclerc]

Re: should i just take redundancy package

Hi im a director and shareholder of a company and to put a long story short they want to make me redundant and have offered me £10000 and told me to accept it within 7 days or i receive just my statutory 10 weeks pay which equates to just under £3000. I feel it should be nearer the £25000 mark because of the hard work i have put in over the last 10 years and because of the 5% shares i have in the company.

Where do i stand in making a counter offer saying that i will not accept the £10000 but instead will go for £20000???

any advice appreciated

Wig, what you have done for the company is irrelevant, I'm afraid. 10k is a good settlement but is that redundancy plus your shares?
Does the company trade on the stock market? If they do would 10K be reasonable(ie are the shares worth 7k on top of the statutory redundancy package)?

Eloise will be along soon but I doubt you are legally entitled to counter offer a redundancy package.

[wig77]

Re: should i just take redundancy package

no they dont trade on the stock market, and they dont even mention my shares in the package they offered im just presuming they want me to give them up too

[leclerc]

Re: should i just take redundancy package

no they dont trade on the stock market, and they dont even mention my shares in the package they offered im just presuming they want me to give them up too

Ask about the shares issue but 10K is a good package if it's without the shares, imho.

[wales01man]

Re: should i just take redundancy package

how much are the shares worth?

[wig77]

Re: should i just take redundancy package

thanks for the replies leclerc my dad is saying just forget about the shares because they are not worth anything unless someone wants to buy them but i think differently and i should try and keep them surely or get a bigger package.
the company has to be worth £500,000 at least so thats £25000 shares id settle for £20,000. Seems fair to me

[Eloise01]

Re: should i just take redundancy package

What the company is worth is irrelevant to the worth of the shares. Your father is quite correct - shares are worth what someone will pay for them. Can you sell them for £7k on the open market (the difference between what they are prepared to offer you and what you will get in seven days if you don't agree)? No? Then they aren't worth £7k., never mind £25,000.

You can try to negotiate what you like, but the clock is ticking and there is nothing to stop them taking the offer of £10k off the table right now - they are not legally bound to keep an offer open for seven days, no matter what they said.

[wig77]

Re: should i just take redundancy package

thanks for the replies everyone looks like im taking the £10000.

[MissFM]

Re: should i just take redundancy package

Hi im a director and shareholder of a company and to put a long story short they want to make me redundant and have offered me £10000 and told me to accept it within 7 days or i receive just my statutory 10 weeks pay which equates to just under £3000. I feel it should be nearer the £25000 mark because of the hard work i have put in over the last 10 years and because of the 5% shares i have in the company.

Where do i stand in making a counter offer saying that i will not accept the £10000 but instead will go for £20000???

any advice appreciated

Hello wig77

I see this slightly differentlly from the advice above but stand to be corrected!

There are three separate issues here (as I see it)

- your employment and entitlement to statutory redundancy pay

- your position as "Director" (ie office holder) which does not necessarily correlate with employment

- your equity in the company

In your position I would regard the 10K as being either

-(my first choice) an enhanced redundancy package

or

- statutory redundancy pay plus an honorarium in recognition of your retirement as director (if you intend so to do)

your equity in the company is a separate issue IMHO.


In your position I would take the 10 Gs subject to the above - ie negotiate over your directorship if you want it and negotiate your equity separately.

[Eloise01]

Re: should i just take redundancy package

Hello wig77

I see this slightly differentlly from the advice above but stand to be corrected!

There are three separate issues here (as I see it)

- your employment and entitlement to statutory redundancy pay

- your position as "Director" (ie office holder) which does not necessarily correlate with employment

- your equity in the company

In your position I would regard the 10K as being either

-(my first choice) an enhanced redundancy package

or

- statutory redundancy pay plus an honorarium in recognition of your retirement as director (if you intend so to do)

your equity in the company is a separate issue IMHO.


In your position I would take the 10 Gs subject to the above - ie negotiate over your directorship if you want it and negotiate your equity separately.

I agree entirely. So - - the employer can give you statutory redundancy of less than £3k since, as an employee you are entitled to nothing more. Hold a meeting of directors /shareholders in accordance with the company procedures and have you removed as a director for no cost. And leave you with worthless shares that you cannot sell. But it's certainly another option...

[Eloise01]

Re: should i just take redundancy package

Ps - what you "regard" the package as, in terms of this advice above, is irrelevant. The package is what it is - you can't decide to regard it as something else. The £10k has been offered with specific terms - your employment and directorship. Your choices are take it, or haggle with the risk you lose the enhancement.