The Strategic Retention Advantage of Retirement Notice Periods

Retaining key talent is a top priority for boards. Late career movement between companies is increasingly common as executives continue to retire later than ever. Traditionally, noncompete arrangements precluded executives from retiring and then immediately going to work for a competitor. However, as the legality and enforceability of noncompete arrangements continue to shift, this mechanism for protecting against the poaching of executive talent is becoming less dependable. Numerous states—and now the Federal Trade Commission—have prohibited or restricted noncompete arrangements. As a result, companies are finding themselves in need of other means to retain executive leadership. Implementing a notice period tied to the vesting of equity at retirement can enhance employee retention and provide financial and strategic advantages...

Bob Romanchek is a partner at the executive compensation consulting firm Meridian Compensation Partners.

Sam Bricker is a senior consultant at the executive compensation consulting firm Meridian Compensation Partners.