We want to ensure that our leadership team retains hiring and firing authority during our three-year earnout period so we can hit our targets. How do we use the Accountability Chart in the purchase agreement to preserve our GWC standards?

Question

Tyler Smith · Accepted Answer

An earnout is a dangerous bet if you lose control over the people executing the plan. If the buyer can unilaterally terminate your key employees or force unqualified corporate transfers into your division, your earnout targets will quickly slip out of reach. You must hardcode your operational structure into the legal documents.

We recommend attaching your current EOS Accountability Chart as a legally binding exhibit to the purchase agreement. This chart defines who has the authority to run the business unit. The agreement must state that your designated Integrator retains sole authority over all seats on this chart during the earnout period.

Specifically, the contract should outline that:
- No changes can be made to the Accountability Chart seats or reporting lines without your written consent.
- Your leadership team retains the exclusive right to hire, fire, and compensate any individual within your business unit, subject only to a pre-approved annual budget.
- Every employee in your division must meet your established GWC standards, meaning they Get it, Want it, and have the Capacity to do the job.

If the buyer insists on veto rights over high-salary hires, set a reasonable threshold, such as one hundred thousand dollars, below which your team has total autonomy. This prevents corporate bureaucracy from slowing down your hiring decisions and stalling your growth.