Key Words

What is the meaning of:

“GOOD LEAVER”?

“Good Leaver” is a phrase most commonly used by employers headquartered or doing business primarily outside the U.S. It is most often used in relation to incentive compensation, equity compensation and deferred compensation Plans.

Being considered a “Good Leaver” means just what it sounds like: when you “left” you did so in a “good” way, from the employer’s point of view. What does that mean? Generally, these four things, but each Plan may be different:

(i) You did not resign, or if you did, you gave the amount of notice required;
(ii) To the employer’s knowledge you never engaged in “bad acts” at work;
(iii) Upon leaving, you did not violate any non-competition, repayment or other obligation;
(iv) If you departed the employer due to retirement, disability, or death, you are generally considered a Good Leaver.

What are the consequences of being either a “Good Leaver” or a “Bad Leaver?” Good Leavers are usually allowed to keep their unvested compensation or equity benefits, which can continue to vest over time. Good Leavers also are often permitted extensions of time to exercise benefit rights, including those relating to stock options.

“Bad Leavers” get nothing.

Is it always good to be a “Good Leaver?” Usually, but at times the advantages of following your own interests, in contrast to your employer’s, are in fact more advantageous. That’s especially so if you have, in advance, successfully requested that your next employer “make up” for the losses you may have incurred by being a “Bad Leaver.”

Whatever you do, don’t take what people call you personally. Instead, let your integrity, your conscience and your heart be your guide.                   

P.S.: If you would like to speak with Al Sklover directly about this or other subjects, I am available for 30-minute, 60-minute, or 120-minute telephone consultations. Just [click here.]

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