The top corporate officers of each company will be different based on the internal decisions made by the board of directors. For example, some top level combinations are:
- CEO and President,
- COO and President,
- CEO and Chairman, and so on.
When a C level officer takes a position in a corporation, it is very important that the officer enter into certain agreements with the corporation. Two such important agreements are: a nondisclosure agreement, and a noncompetition agreement. Click here for sample agreements.
Although directors of a company are appointed through voting by the shareholders, C level officers are appointed by the board of directors through its resolutions.
C level positions are highly compensated. Generally, executive compensation for a high level corporate officer is determined based on certain practices and policies of a corporation. However, laws under the Federal Securities Act require a public corporation to provide a complete disclosure of the executive compensation made to its certain C level officers. The proxy statement made annually by a corporation helps you to know the compensation amount and all other incentive or incentives paid to its corporate officers. The proxy statement also discloses the standard used in deciding the executive compensation.
Stock options are another way of compensating a corporate officer. The corporation tries to link the officer's interest to the company through stock options.
Officer liability has increased in the recent years. Until recently it was believed in the absence of fraud, corporate officers are immune or free from corporate liability.
Now, corporate officers can be made personally liable if they cause financial harm to the company. Hence, it has become necessary that the corporation indemnify its corporate officers. Through indemnification it is understood that the corporations will compensate its C level officers for all expenses incurred and paid while defending claims against them when employed with the corporation. Currently, most of the states have brought statutes with provisions relating to directors and officers liability insurance and indemnification.
A corporate officer is appointed to the position for a certain period. If the officer decides to resign before the tenure is complete, the officer should make the resignation in writing. The resignation should provide for an effective date of resignation. Also, the resignation should be made with adequate notice. Click here for a sample resignation letter.