Employment Contract with Company’s Principal

Abstract

Batusova Ekaterina - Postgraduate Student, Department of Labour Law, National Research University Higher School of Economics. Address: 20 Myasnitskaya Str., Moscow, 101000, Russian Federation. E-mail: batusovs@rambler.ru.

The article is devoted to the issues of legal regulation of chief executive officer (CEO) labour. The legal position of CEO has a dual nature: chief executive officer is an employee of the organization, and, simultaneously, CEO is a legal person as the Sole Executive Body. The author emphasizes that employment relationship with chief executive officer is not always sufficient to conclude a labour contract. Other legal facts, which may be election, appointment and others are necessary too.

Specific position of chief executive officer   determines the specific features of its legal status: first, it is under the organization's Charter represents its interests in relations with partners; secondly, CEO is the authorized representative of the employer in relations with the employees of the organization, has the rights and duties of the employer in labour and directly related to labour relations; and third, the CEO is an employee. As an employee CEO is economically weaker side in comparison with the owner.
The author notes that a certain peculiarity of chief executive officer’s   legal status gives the specificity of the performed work involves simultaneous combination of professional knowledge and skills in certain segment of the economy and qualities of a competent manager. In the article the questions of the tests when hiring, remuneration, dismissal from performing their duties, termination of employment and other aspects are risen.
The author pays special attention to the problem of payment of work of CEO. The remuneration of the chief executive officer is determined by agreement of the parties in his employment contract. The remuneration system of CEO is not fixed in local  acts of employer (as a system of material encouragement of employees).  Stimulating payments for chief executive officer are  prizes, bonuses, stock options, bonus shares, pension plans, preferential loans and amounts paid as severance pay, i.e. the «golden parachutes». Depending on the organization's goals and activities the owner can use short-term and long-term incentives. In particular if you are interested in long-term relationships with the CEO, you can use preferential crediting which allows to keep CEO from the change of the place of employment.