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Financial Sector Employment

We represent a wide range of Wall Street and other financial sector professionals and executives in the negotiation of employment and severance agreements and in FINRA arbitrations and other employment and partnership litigation. Our clients include investment banking and capital market professionals and executives at many of the leading domestic and international commercial and investment banks, hedge funds, private equity firms and other financial institutions.

Unique Employment Issues

Financial sector professionals face a number of unique issues in the employment law context. Amongst these are:

  • Compensation Structure. The majority of their annual compensation is usually paid by means of incentive-compensation or bonuses with salary comprising a relatively small component of compensation.
  • Restricted and Unvested Compensation. Substantial portions of their annual compensation are usually paid in the form of restricted equity (or, increasingly, in restricted cash) which may be forfeited in the event of termination of employment and/or post-employment work for a competitor and may be subject to "claw-back" in the event of losses in future years.
  • Contracts. Financial sector executives and professionals frequently have less formal "offer letters" and company-wide restricted equity plans as the governing legal documents relating to their compensation rights and post-employment restrictions instead of the more formal and detailed employment agreements that are common for executives in other sectors of the economy. However, the less formal nature of these documents does not lessen the importance of carefully negotiating protections and compensation guarantees before the documents are signed.
  • Restrictive Covenants and Garden Leave. Financial sector professionals generally are subject to Garden Leave and other restrictive covenants restricting their ability to commence employment elsewhere and limiting or prohibiting post-employment solicitation of employees and clients of the former employer for a period of time.
  • Mandatory Arbitration of Disputes. Employment contracts and securities licenses frequently require resolution of most compensation disputes through mandatory FINRA or other industry arbitration.
  • Group Moves. The various factors outlined above present additional challenges in the context of group moves from one employer to another. For example, group leaders face potential claims that their participation in the solicitation and recruitment of other group members violated their employment agreements and may result in forfeiture or retroactive claw-back of restricted equity or cash awards.

Current Financial Crisis Issues

The recent turmoil in the world's financial markets and institutions has added new and constantly-evolving challenges for financial sector professionals and executives. For example, Congress has imposed various restrictions on the compensation that can be paid to executives at financial and other institutions participating in the Troubled Assets Relief Program (TARP). The Firm provides advice to clients regarding the impact these developments may have on existing compensation packages and how to structure new employment and compensation agreements in light of these developments.

Representative Client Engagements

Representative examples of the Firm's financial-sector client engagements include:

  • Representation of the head of the mortgage banking advisory practice in moving from the Financial Institutions Group of one leading global bank to another.

  • Representation of the co-heads of leverage and acquisition finance in their move from one leading global bank to another.

  • Representation of the head of equity derivatives at a leading global bank in litigation alleging that the level of her compensation and the decision to terminate her were the product of gender discrimination and retaliation.

  • Representation of the head of senior debt loan trading at a leading global bank in a move to another leading global bank.

  • Representation of a senior trader at a hedge fund in litigation to recover a guaranteed bonus the firm refused to pay.

  • Representation of one of the five most senior executives of a leading investment bank in negotiating the terms of his retirement and continued vesting and payment of substantial unvested restricted equity awards.

  • Representation of the CEO of a publicly-traded investment advisory firm concerning the terms of his separation upon a successful tender offer, his subsequent consulting contract and his employment at a new firm following expiration of his non-compete obligations.

  • Representation of a hedge fund partner in negotiating a separation and buyout of his equity in the fund advisor.

  • Representation of a senior executive at a leading private equity firm in negotiating the terms of his departure from the firm.

  • Representation of a senior big-four accounting firm audit partner in negotiating a resolution of claims that the firm breached its agreement regarding his assignment following a multi-year expatriate assignment to lead the audit of one of the firm's most important European clients.

  • Representation of three female investment advisors employed by a major retail brokerage firm in litigation against the firm for systematic gender discrimination in the assignment of customers promotion and pay.