In this article, we focus on a key post-acquisition topic; what
to consider when an institutional investor is faced with, or wishes
to bring about, the departure of a member of the investee
company's executive management team who also holds shares or
share options.
This is a topic fraught with complexity; legal (what is the
impact of company and employment law?), financial and commercial
(what is the loss/cost to the business?) and emotional (how is the
manager in question behaving/going to behave, and how will other
managers and employees react?).
1. Employment law
Any executive director such as a CEO, COO or CFO (as opposed to
a non-executive director, who is not performing a permanent role in
the company day-to-day) will be an employee, and the terms of this
relationship will be documented in a 'service' or
employment contract. The resignation or removal of that director
will therefore require the termination of their status as an
employee.
