By Tracie Kenyon, MCU President/CEO
One of the questions that I often hear from board members is, “should we offer our CEO a contract?” Before I answer that question, I need to provide a disclaimer: I am not a lawyer and cannot provide you legal advice; the comments in this blog are my opinion only. In fact, I encourage you to seek counsel from a lawyer prior to entering any contract.
Now, with that out of the way, let me share my thoughts. I think that contracts for CEOs are a good idea for several reasons: 1. You can outline specific deliverables; 2. You can offer benefits not afforded to other employees; 3. You can negotiate a graceful exit by not renewing a contract.
I also believe that a contract can keep things from getting too personal; for example, if the employment contract calls for an annual review and one of the parties is balking, the other party can refer to the agreement. Remember that generally speaking, contracts are negotiated at the beginning of the relationship when both parties are in full agreement and should be seeking their own legal counsel to review the document to ensure that it is fair to all.
If you’re hiring a new CEO, I recommend a one-year contract as a bit of a trial run. At the end of the first year, you can negotiate a longer contract as both parties have had 365 days to get to know each other.
I cannot stress this enough: if you’re considering a contract, please contact your attorney! And, as always, feel free to reach out to me with any questions, I’m happy to share my opinion and experience in working with credit unions across Montana.